In Massachusetts, where home sales dropped 12 percent this spring, the housing and mortgage markets are on ice in this hot summer.
But keeping mortgage broker John Battaglia busy are calls from some homeowners whose mortgages are about to shoot up.
"These customers could have rate increases, maybe not only this change date, but maybe a year from now," he says.
Why? They have adjustable rate mortgages, also called ARMs. During the boom, the low adjustable rates made it easy for people to buy homes — some they couldn't afford otherwise — but now many of those rates are going up.
So Marc Anderson is switching to a fixed-rate mortgage for his Phoenix home.
"I want something that I know is going to be there five years from now," he says. "I don't want my interest rate or payments to change in anyway."
So how much could an increase hurt?
Let's look at a three-year ARM on a $200,000 mortgage. Taken out in 2003 at a rate of four percent, the monthly payment was $955. Now, the rate could jump as high as 7.6 percent, boosting the payment to $1,375, a 44 percent increase.
And it's not just mortgage rates. Homeowners are getting hit from all sides. Rising interest rates mean bigger credit card bills, higher energy prices mean increased costs to heat and cool your home, and the cost of gasoline makes it expensive to drive to and from it.
Rick Sharga tracks foreclosures. His firm saw a 25 percent increase this spring. He says this wave of resets is the wild card in housing.
"In a worse case scenario, you could have so many properties into foreclosure that it depresses the value of homes on the market," he says.
And that would put the once sizzling housing markets into a deep freeze.