Former U.S. President Jimmy Carter and Habitat for Humanity officials said on Saturday they expect stress in the subprime mortgage market to boost demand for housing for low-income families.
Jimmy Carter "I think (with) the subprime market being so fluctuating and uncertain, and making it more difficult to own homes, it will be even more important for Habitat to expand its program," Carter, the 2002 Nobel Peace Prize winner, said at an event announcing the nonprofit group's plan to build more homes in the Los Angeles area.
Default rates on U.S. subprime mortgages made to borrowers with poor credit histories have jumped in recent months, compounded by a cooling domestic housing market that is forcing down prices and making it harder to quickly sell a property.
California has the most subprime mortgages of any state. At the end of December, those loans accounted for just over a fifth of all mortgages in the nation's most populous state, according to First American LoanPerformance. Separately, homeowners lured by very low initial interest rates on so-called "teaser" loans are seeing or will soon see their interest and payments rise, stoking fears there are more foreclosures to come. Housing analysts predict between 1 million and 3 million U.S. homes will be foreclosed upon in 2007.
"We have more people that are going to need our program, and the need is just going to grow even greater," said Erin Rank, chief executive of Habitat for Humanity of Greater Los Angeles, where the average cost of a home is now $550,000.