Impacts on Global Economy

2381 Words10 Pages
Impact of Housing Market Crash “The Impact of housing Market Crash on Global Economy” The housing market in the United States became a nightmare for many people who had taken out loans found and they were not able to pay their mortgage repayments. When the value of homes decreased, the borrowers realized themselves with negative capital. The negative movement of housing sector did effect the United States economy. Individual house owners and investors could not react to the situation and their properties lost value. Rates of mortgages increased extremely high that’s why mortgages no longer became affordable for many people, and thousands of mortgages defaulted. Many banks and investment organizations start have…show more content…
Then previous summer came the subprime crisis across the Atlantic. By end of the summer, there was a run on a British lender, Northern Rock. A month later, mortgage approvals dropped 31 percent, compared with the number in the previous year, and by November, real estate brokers began reporting the first declines in housing prices. In March, average prices fell 2.5 percent, the largest monthly decline since 1992, according to HBOS, a mortgage lender. (Mark Landler, 2008) “In 2009 the total value of construction in Ukraine fell 48.2%, to 4.78 billion US dollar, after a 16% fall in 2008, according to the State Statistics Committee. In Chernovtsy, the centre of Western Ukraine, popularly known as Little Vienna, construction volumes plummeted 66.8% in January, compared to the previous year. In Kiev, construction volumes fell 27.4% over the same period. As a result of the global crisis, developers now face financing problems. As a result, many construction projects are frozen. In addition, the property market is being swamped by properties sold by cash-strapped buyers.” (Global Property Guide 2011) "The boom in house prices was actually much bigger here than in the U.S.," said Kelvin Davidson, an economist at Capital Economics in London. "If anything, people should be more worried than in the U.S."Britain has the most developed home-financing industry,
Open Document