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United States housing bubble
- Created 2012-02-18
United States housing bubble
affecting many parts of the
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. The credit crisis resulting from the bursting of the housing bubble is — according to general consensus — the primary cause of the 2007–2009 recession in the United States.
rates in 2006–2007 among U.S. homeowners led to a
in August 2008 for the
collateralized debt obligation
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,
, home supply retail outlets,
held by large institutional investors, and
s, 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
Chairman of the Federal Reserve
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
(both of which are
s) 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
from Wikipedia (last updated: 13 December), licensed under
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