November 1, 2005
Conway agreed with the assessment, saying that the data compiled by the Lusk Center indicates “a soft landing” for the housing market. The greatest risk lies with buyers, who have taken out interest-only mortgages. Mozilo followed up by saying while there is nothing wrong with those types of loans, he’s witnessed “abusive sales of them to individuals” that lack the credit to weather the riskier financial packages.
Zandi opined that the homes in the Southland are overpriced by 10% to 20% and the trigger to the flattening of the market will be rising interest rates. He also noted that the increase of interest rates over a shorter period of time would have more of an impact on the market than a slow and steady increase.