Now the crisis has come and gone, and the nation is still gingerly picking its way out of the wreckage. And for several years homebuyers have flocked to safer and more traditional mortgage products, and it's possible that the new wave of interest in ARMs isn't that scary, economically. Maybe it's temporary -- maybe prospective buyers will, in the face of higher interest rates, look to buy cheaper houses.
But what if it isn't?
Cameron Findlay, the chief economist for Discover Home Loans, told me that the rush to adjustable-rate loans signals to him “that the consumer psyche is, they’re still reaching. If an interest-only product still existed today, I think they’d be jumping right back on that.”
He added: “Sadly, us as Americans, I think we have a very short memory span on all that stuff.”
It's early to tell, but the same might be true on credit-card debt. The Federal Reserve said this month that revolving consumer credit -- credit cards, overwhelmingly -- increased an annualized 9.3 percent in May. The measure is volatile, but it's trending back up toward pre-crisis levels.
Again, this might not be a bad thing -- as my colleague Neil Irwin points out. But if America's still-not-roaring recovery is being financed more and more by debt, and if the definitely roaring housing market recovery starts to depend on riskier and riskier mortgage products, well, that would be a textbook definition of short memory.