Monday, May 08, 2006

It's the Economy, Stupid

As an about-to-be home owner mortgage holder we've been paying attention to interest rates, closing costs, and the like. We also just learned of an acquaintance purchasing a 1,000-square-foot home in the San Francisco area for nearly $500,000. So this bit from the New York Times caught our eye:

The rising costs have contributed to a 38 percent increase nationally in home foreclosures in the first quarter of this year over the same period in 2005.

In the past, the Times notes, "nothing is a better predictor of foreclosures than high unemployment and credit card delinquencies." So while Bush and Co. continue to point to low unemployment, a healthy Wall Street, and healthy consumer sales, the truth is that the current economic flu is of a different variety. The prevalence of adjustable rate mortgages, gas prices, and health care costs suggest that an economic collapse of a different sort may be underway. A sick economy, just a different virus.