United States Housing Bubble

The United States housing bubble is an economic bubble affecting many parts of the United States housing market in over half of American states. Housing prices peaked in early 2006, started to decline in 2006 and 2007, and reached new lows in 2012. On December 30, 2008 the Case-Shiller home price index reported its largest price drop in its history.

Increased foreclosure rates in 2006–2007 among U.S. homeowners led to a crisis in August 2008 for the subprime, Alt-A, collateralized debt obligation (CDO), mortgage, credit, hedge fund, and foreign bank markets. In October 2007, the U.S. Secretary of the Treasury called the bursting housing bubble "the most significant risk to our economy."

Any collapse of the U.S. Housing Bubble has a direct impact not only on home valuations, but the nation's mortgage markets, home builders, real estate, home supply retail outlets, Wall Street hedge funds held by large institutional investors, and foreign banks, increasing the risk of a nationwide recession. Concerns about the impact of the collapsing housing and credit markets on the larger U.S. economy caused President George W. Bush and the Chairman of the Federal Reserve Ben Bernanke to announce a limited bailout of the U.S. housing market for homeowners who were unable to pay their mortgage debts.

In 2008 alone, the United States government allocated over $900 billion to special loans and rescues related to the US housing bubble, with over half going to Fannie Mae and Freddie Mac (both of which are government-sponsored enterprises) as well as the Federal Housing Administration (which is a United States Government agency). On December 24, 2009 the Treasury Department made an unprecedented announcement that it would be providing Fannie Mae and Freddie Mac unlimited financial support for the next three years despite acknowledging losses in excess of $400 billion so far. The Treasury has been criticized for encroaching on spending powers that are enumerated for Congress alone by the US constitution, and for violating limits imposed by the Housing and Economic Recovery Act of 2008.

Read more about United States Housing Bubble:  Background, Identification, Extent, Side Effects, Housing Market Correction

Famous quotes containing the words united states, united, states, housing and/or bubble:

    The United States themselves are essentially the greatest poem.
    Walt Whitman (1819–1892)

    In the United States, it is now possible for a person eighteen years of age, female as well as male, to graduate from high school, college, or university without ever having cared for, or even held, a baby; without ever having comforted or assisted another human being who really needed help. . . . No society can long sustain itself unless its members have learned the sensitivities, motivations, and skills involved in assisting and caring for other human beings.
    Urie Bronfenbrenner (b. 1917)

    I believe the citizens of Marion County and the United States want to have judges who have feelings and who are human beings.
    Paula Lopossa, U.S. judge. As quoted in the New York Times, p. B9 (May 21, 1993)

    We have been weakened in our resistance to the professional anti-Communists because we know in our hearts that our so-called democracy has excluded millions of citizens from a normal life and the normal American privileges of health, housing and education.
    Agnes E. Meyer (1887–1970)

    While this America settles in the mould of its vulgarity, heavily
    thickening to empire,
    And protest, only a bubble in the molten mass, pops and sighs out,
    and the mass hardens,
    Robinson Jeffers (1887–1962)