Few people foresaw the housing market crash 15 years ago that ignited a worldwide recession. Fueled by low-interest rates, loose mortgage lending standards, and the nation’s unshakeable faith in homeownership, home values rose at record rates year after year. When the housing bubble burst, some nine million families lost their homes to foreclosure or short sale between 2006 and 2014. Housing values plunged 30% or more, homeowners lost a collective $7 trillion, and it took nearly a decade for most markets to recover.
If you have followed the news at all over the last few years, you know that much of the financial mess from 2008 forward started with the subprime mortgage market. After covering the material in our text dealing with real estate finance, do you feel you have a better understanding of what has gone on? What are your thoughts about the situation during the years just after 2008 as well as the lasting effects of the subprime mortgage crisis?
With the robust market activity we’ve seen lately, are we in for a repeat housing market crash? There are a number of different articles discussing this possibility. Here is a link to one of them, https://www.bloomberg.com/news/articles/2021-06-10/real-estate-prices-are-soaring-but-there-s-no-sign-of-a-housing-bubble.
What do you think?
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