Tuesday, March 21, 2006

This can't be good:

...More than one-quarter of Boston's mortgage-holders appear to be stretched thin financially, spending at least half their income on housing, according to an analysis of census figures....

Typically, homeowners should spend no more than 30 percent of their income on housing, financial planners say....

These people are in over their heads. And it's taking a toll:

Rising interest rates are pushing up the costs for those who have adjustable mortgages. At the same time, these homeowners are finding it harder to sell.

The number of homes sold in Massachusetts dropped a whopping 21 percent in January compared with a year ago, the largest year-to-year decrease in monthly home sales in a decade. As a result, home values have begun to soften. Statewide, they actually fell slightly in January compared with a year ago.

Such pressures are forcing a rising number of homeowners to erase their debts by forfeiting their homes. Foreclosure filings in the county that includes Boston nearly doubled in January from a year ago, ForeclosuresMass. says....

Another big jump in energy prices -- a military strike against Iran, perhaps? maybe just in time for the November elections, which is precisely when New Englanders start needing home heating oil? -- could put even more pressure on these people. This may not be a nationwide problem, but in places like Boston it's going to get very ugly.

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