2 Question Tuesday – 06/11/2024 –  If Adjustable-Rate Mortgage Payments Double, Will This Hurt The Economy & If Moody’s Downgrades Regional Banks Over CRE, Will This Affect The Markets?

Welcome to 2 Question Tuesday. This week’s client submitted questions were:

  1. If adjustable-rate mortgage payments double, will this hurt the economy?
  2. If Moody’s downgrades regional banks over CRE, will this affect the markets?

Phil, Mike, and Larry discuss how a million homes since 2019 have been bought with an adjustable-rate mortgage. Many of these loans are set at a rate lower than the prevailing 30-year interest rate for the first few years, then adjusted based on current borrowing costs. Coming out of the fixed period after interest rates soared is terrible timing for more than 330,000 borrowers. These payments could double and some homeowners say they might delay or default on their mortgage after that happens. They then talk about how Moody’s, the ratings agency, said it may downgrade the ratings of six U.S. regional banks due to their exposure to commercial real estate loans, and wonder what the repercussions might be for the stock market?

Submit your questions to question@2questiontuesday.com

As always, if you have any questions at any time, please feel free to call your adviser directly at (845) 691-4035.

Host Lawrence Carrel’s books available available at Amazon.com