Is there a housing bubble and if so, what are the causes?
But the report also fed growing concern among some observers that the rapid increases in housing prices represent a so-called housing bubble that could be at risk of a correction.
July 25, 2005
Walter Molony, spokesman for NAR, added while there has been "an explosion in first time homebuyers using no-down payment loans" or other exotic mortgage products, he didn't think there was necessarily a direct correlation between the availability of flexible home financing products and the housing spike.
Federal Reserve Chairman Alan Greenspan, who does not believe there is a bubble in the national housing market, warned Congress in testimony last week that there could soon be declines in prices at least some of the markets that have seen home prices soar
Prices will flatten in most ex-boomtowns this year, and next year will be worse, says David Stiff, Fiserv's chief economist. "A lot of markets--particularly those where prices have increased dramatically compared with income--will see drops by late 2007."
That doesn't mean, however, that real estate is about to crash across the U.S. …"There are sizable parts of the nation's housing market that will be just fine," says Economy.com’s Marc Zandi
David Seiders, chief economist for the National Association of Home Builders, said that in light of those concerns and the increase supply of homes on the market, the slowdown in building is a good thing for the market.
April 18, 2006
A housing-price drop would not be bad for everyone. In fact, many canny real-estate investors have been hoping for just such a hit… Falling markets can even sometimes have a positive effect on how much landlords can charge for rents by increasing the demand for rental units
Take a deep breath. We're not forecasting a nationwide housing collapse. For one thing, the vast expanse of America between the coasts was never touched by real estate mania and is in no danger of a meltdown.
May 5, 2006
New York, Citigroup senior economist Steven Wieting said that concerns about a recession due to softness in the housing market are overdone.
By the end of the weekend, the Federal Reserve had stepped in to try to calm the markets by announcing plans to loosen its lending restrictions on the banking industry.
This month, the U.S. government took over mortgage finance companies Fannie Mae and Freddie Mac. That was Washington's most dramatic attempt yet to shore up the nation's faltering housing market, which is suffering from record foreclosures and falling prices. That plan calls for the government to run Fannie and Freddie until they are on stronger footing
Stocks rallied around the world as details of the rescue plan emerged with New York's benchmark Dow gaining 7.3 percent since late Thursday, its biggest two-session gain since October 2002. London's FTSE 100 jumped 8.8 percent, Shanghai closed up a record-breaking 9.5 percent and Hong Kong gained 9 percent as investor confidence returned.
When you think about putting an automaker out of business, you put tire makers out of business, you put seat makers out of business, you put all sorts of things out of business. It's the same thing with AIG. There are tentacles. They're just so connected to so many other parts of the economy that the government deemed it more dangerous and potentially more expensive to the economy to have it fail than to give them this loan
For older Americans, it's a particularly vulnerable time. The stock market is down, the housing market is slumping, and costs for things such as groceries and gas remain higher than in previous years.
Sept 19, 2008
As a student?
But students like Hahn remain on the fringe. Even after being awarded an out-of-state tuition waiver, which lets him pay the same tuition as a resident from Georgia, he says he has borrowed all he can in federal loans. His parents, who are facing their own financial struggles, can't co-sign for a loan with a lower interest rate or better terms
“ Unfortunately the unemployment rate is probably going to increase again before it continues on a downward trend. That's primarily because the jobs recovery has been slow enough that many people who are unemployed are not actively seeking job opportunities… Unemployment could go up to 9.7% to 9.8% to 10%.”