Volatility is not something usually associated with bricks and mortar. But since late February when investors woke up to the problems in the US subprime mortgage market, Vix (a measure of implied stock market volatility) has risen from the eerily low levels to which it had sunk for the latter part of last year. Having remained largely below 12 for that period, it bounced briefly to about 20 and is still above recent lows.
Part of that is the heightened risk of contagion. Some investors fear that subprime problems could leak through to the rest of the housing market and the US economy more generally. That impact still appears manageable, in spite of some signs such as American Home Mortgage's acknowledgement that the better credit quality alt-A mortgage market is also being affected.
