The Crisis Begins
As 2008 began, some hope existed that the worst of the subprime crisis was past, but a number of troubling signs suggested otherwise. Some 2.1 million houses were for sale in the United States as the new year dawned, 2.6 percent of all existing homes-a figure exceeding by far the peak of 1.9 percent experienced during market downturns over the previous twenty-five years. About 25 percent of subprime home mortgage loans were delinquent or in default as 2007 ended, a rate that was likely to grow. Approximately 1.8 million subprime loans were scheduled to reset during 2008 and 2009 at interest rates well above their initial teaser rates.