Bubble Grows, Defies Experts
As all the experts predict home prices will level off, not burst, the facts continue to show a bubble expanding. "Freddie Mac said 64 percent of its loans that were refinanced in 2005's first quarter resulted in new mortgages with loan amounts at least 5 percent higher than the original mortgage balances."
"In comparison, in the fourth quarter of 2005, 56 percent of refinanced loans had higher new loan amounts. That quarter was the highest since the fourth quarter of 2000."
"The share of borrowers who decided to cash out some home equity as part of their refinancing increased as well, Nothaft said. This helped prop up consumer spending on home improvements."