![]() At the same time, the median US household income dropped from $54,489 in 2007 to $52,195 in 2009. From late-2007 through mid-2009, the Bureau of Labor Statistics says nearly 9 million Americans lost their jobs. A home worth 375,000 at todays record-low interest rates of 2.8 would result in around 100,000 of interest to be paid over a 30 year period, making the total dollar price for the purchase. When the situation reached a boiling point, it provoked a foreclosure crisis among homeowners and a credit crisis among the investors who owned bonds backed by defaulted mortgages - and ushered in a global recession.ĭuring that economic downturn, household wealth declined for millions of Americans. Talk of a housing bubble is now common among analysts including those at Swiss banking giant UBS, who back up their claims with charts showing how home prices are outstripping both wages and. The housing bubble that triggered the 2008 crisis was created from a combination of cheap debt, predatory lending practices, and financial engineering that led to many borrowers being placed into unaffordable mortgages. This time around, she added, household finances are stronger and home values remain at historic highs. "It's no secret the housing market played a central role in the Great Recession, but this market is just fundamentally different in so many ways."Īccording to Kushi, today's market irregularities are attributed to an imbalance between supply and demand, while the housing bubble in the mid-2000s was caused by wider access to mortgage financing. ![]() "This is not the same market of 2008," Odeta Kushi, First American's deputy chief economist, told Insider. Account icon An icon in the shape of a person's head and shoulders. A sold sign sits in front of a new home being built in Miami on April 16.
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