This week we continue our look into the factors involved in housing prices. Specifically, we are going to look at the affect of Adjustable Rate Mortgages (ARMs) on values. Do they pose a risk for the economy at large as rates rise? Some see them as a major crisis in the making, while others see no harm. Plus, we look at just how important housing is to the US economy. It should make for interesting reading.

But before we begin, let me briefly answer a few questions I have been getting of late, as we have a large number of new readers. Basically, the questions run: Why do you write this letter? Why is it free? How do you get access to so much information and what do you really do for a living?