The United States Housing Market

1087 Words Dec 16th, 2015 5 Pages
The United States will always recall autumn of 2008 as a time of financial terror, and rightly so. After the stock market crash, millions of Americans, previously unaware of the brewing crisis, lost their businesses, their jobs, and their homes. Even now, we still are in a period of recovery from the economic turmoil of that year. How did this happen? Simply put, it all commenced within the United States housing market. In the years leading up to 2008, buying and selling mortgages became a very popular way for lenders to make money. While housing prices continued to increase, lenders found themselves in a win-win situation. If homeowners paid their mortgages, the lenders made money. If homeowners could not pay their mortgages, they would …show more content…
Today, although we have recovered well, we are still impacted economically by this moment in American history. Fortunately, we have put in the work to not only bounce back from this crisis, but to study the situation and learn from what went wrong. As many have said, the fault was in all of the men and women involved in the build-up to the collapse. It was not a matter of machines or models, but our oversight. We have learned plenty from these mistakes. We now know that we have the power to prevent another financial crisis in the future. The oversights of many different groups all led to the chaos of 2008. Looking back, if one or two of these institutions had changed their practices in response to red flags, the growth of the housing bubble could have been dramatically slowed, or even fully prevented. We now know to pay attention to the red flags. We collectively shrugged off signs and signals in the years leading to 2008. The disaster was foreseeable. The extreme increase in subprime lending, the seemingly infinite increase in housing prices, and the increase in national household mortgage debt should have been alarm enough. These passed by either unnoticed, or ignored. Because of our ignorance, we were not prepared to handle the inevitable crisis. We now know to keep financial regulations in place to prevent another economic catastrophe. After fall of 2008, the
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