A lot of people bought houses in 2020 and 2021 like the party would never end. Low rates. Easy approvals. “Rates only go down.” Then 2022 hit and the math changed. Now the bill is coming due.
2020 buyers on a 7/1 ARM? That reset lands in 2027. Some of those payments are looking at about $1,000 more a month. Not a little bump. A car payment. On top of a house payment. The 2022 crowd isn’t off the hook either. A lot of those loans and builder buydowns are aging out, and some of those households are staring at $400 to $500 more. Every month. For years.
So what happens when the payment jumps and the paycheck doesn’t?
What if they never refinanced because rates never came back down far enough? What if the equity they thought they had got eaten by repairs, taxes, insurance, and a softer market?
Do they cut everything else, or do they list?
The economy isn’t exactly handing out raises. Insurance is up. Property taxes are up. Groceries are up. Credit card balances are up. And a chunk of these owners are about to get a second mortgage shock without ever signing a new loan. If they can’t refi and they can’t absorb it, what’s the move? Sell into a market full of other people doing the same thing?
PAnd if enough of them can’t sell fast enough, what does that do to foreclosures in 2027 and 2028? Are we watching the next wave get built in slow motion, or is everybody just going to “figure it out”?
Who in your circle bought in 2020, 2021, or 2022 and still hasn’t locked a fixed rate? Are you on an ARM and pretending the reset isn’t real? Drop the year you bought and what your payment would look like if it jumped $500 to $1,000. I want to see the numbers.