WSJ crunched numbers to build this interactive chart showing the risk of mortgage defaults across the U.S. The point is the turmoil is not over -- about 29% of home loans made last year were subprime, and about $600 billion of adjustable rate mortgages will crank up to much higher payments by the end of 2008. WSJ says it's a myth that these loans only affect the working poor -- speculators, lawyers, physicians and CEOs all got caught up in the binge.
What does this mean for marketers? This wave will ripple beyond buyers, realtors, and Wall Street firms. Home services will take the next hit -- kitchen cabinets, heating oil -- followed by price pressure on margins, higher customer acquisition costs, and slowing sales of durable goods.
The good news: Next spring, you may find great deals on a new Ford or Honda.
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