How Does Stock Market Volatility Affect The Mortgage Industry?

The housing crisis of 2008 can trace its origins back to the stock market trends of the mid- to late 90 's. During a period of extended growth in the stock market, increased individual wealth among investors led to generalized increases in spending, including in the housing market. With more disposable income in the pockets of consumers, the demand for housing increased in the late 90 's. Due to the fact that homes are large projects and their construction takes a large amount of time, the supply of homes in the market is inelastic on the short term. Because of the fixed supply of homes, as per the law of supply, which

Another interesting perspective on the impact inflation has on the housing market is given by the distorted decisions that customers make under the influence of inflation (Hellerstein, 1997). A potential negative correlation could be perceived whereby perceived higher rates of inflation would lead to purchases of houses that would boost the housing markets.

Where there is darkness there is ultimately light and the various homeownership opportunities under the current economy reflect this notion. Real estate prices

The economic decline has possible home buyers, especially first time home buyers, scared to invest anything into the housing market. With the fear of another depression in the back of everyone's minds, some businesses are attempting to clarify the pros of home ownership.

Macroeconomics is an excellent tool for the analysis of the housing industry as something like a capital good, as a home is considered to be, cannot easily be studied in a short-term platform. Real estate is a good that costs several times more than an average persons annual income, in the United States that number is typically 7 times as much, and in the United Kingdom that number is 14 times as much. Several factors of both supply and demand directly impact the housing market on a macroeconomic scale. (Business Economics, 1)

Home Prices & Stock Market. The real estate market continues to move up, and further improvement is likely as unemployment comes down. But home prices remain far below their previous highs.  Americans lost $16 trillion in wealth during the recession, mainly because home values and

Housing bubble in the years leading up to 2008 was a negative impact where real estate bubble where affecting the by more than half of United States economy and Americans. Houses prices where in the sky’s, there were few people who could afford hoses. The ones who were in the military and those who bought their house for the first time had been provided with especial benefits. In attention a collapse of housing bubble is capable of causing serous impacts of homes valuations, mortgage, markets and many other institutions that have larger investments. Furthermore, this bought the collapse of the housing that also came down with it was credit. Many homeowners didn’t have the money to pay their mortgage debts because the mortgage was increasing

Over the past decade, the media and the number of well-known press constantly claim that the prices of house in US is realistically the best evidence of the existence of an asset price bubble in the housing market during the early 2000s. The first effort here we can look at is a survey by McCarthy and Peach (2004) which shows that the level of home prices relative to household income and the level of home prices relative to rent are commonly used to support claims of an asset price bubble. On the other hand, Holcombe and Powell (2009) listed 3 basic views as opposed to the existence of house price “bubbles”: the first one claimed that the existence of “bubbles” is expectedly the results of “real”

Projects that businesses believed would be only marginally profitable become more attractive with lower financing costs. Lower consumer loan rates elicit greater demand for consumer goods. Lower mortgage rates make housing more affordable and lead to more home purchases. They encourage mortgage refinancing, which reduces housing costs and enable households to purchase other goods. When refinancing, homeowners can withdraw a portion of their home equity to pay for other things, such as a motor vehicle, other consumer goods, or a

With the job market now stronger, many people have money saved and are surely eager to own a home again.

One key starting point for a House Price Index is a fixed housing stock. However, the quality of the housing stock is likely to rise as a result of newly built homes. This, in turn, causes the mean or median price to continue to rise even when individual properties are not appreciating (Bailey et al, 1963). For example, if a disproportionate number of high priced homes were sold in a given period, the mean or median price would

The global financial crisis has attracted considerable attention in recent literature. It is well known that the true origins of this financial crisis is that the over-borrowing of US households, especially to finance housing. It had serious affected the financial sector and the macro-economy. According to Shiller (2007), the main reason of the sub-prime mortgage crisis and the worldwide economic and financial crisis of 2007-2009 is the housing bubble. He also believes that the preceding bubble created dynamics and the dynamics of the crisis were self-perpetuating, although in the opposite direction. From the literature, we can see that conventional housing economics research virtually ignores interactions with the

So what’s the future look like for the U.S. real estate market as the world continues to buy in, while our own residents are buying up? Competition has definitely increased for the sale on high end properties as a result of international buyers. Economists are concerned with the market volatility as a result of these home purchases causing real estate prices to soar within selective neighborhoods. The concern is affordability for the next generation of U.S. home buyers creating an exclusive gate into this elite real estate community for local

The current U.S economy is still rebounding from the 2007-2010 subprime mortgage crises. There was a sudden expand in mortgages which contributed to the subprime mortgage crises. The expand in mortgages resulted from an increase of mortgages obtained from borrowers who couldn’t qualify for a mortgage previously. Since more people were eligible for mortgages, house prices increased

The domestic housing market seems to be very inelastic due to the frequent change in prices. Households see homes as important which will result in the extended demand for housing. Suppliers such as builders and property developers have experimented by increasing prices and found that even though prices have risen in a reasonable