The Housing Market and the Economy
Before the housing market crisis threatened the collapse of the American economy, housing prices formed the foundation of an apparent economic boom. Unfortunately, much of that boom was built on a bubble of speculation, in the housing market and elsewhere. When the bubble burst, the economy slid into a deep recession not seen since the days of the Great Depression in the 1930s.
The economy has technically been in recovery since 2009, and many large corporations, along with Wall Street, have enjoyed record profits and all time highs. However, many sectors, especially employment and housing, have lagged far behind. One of the major factors dragging the pace of the recovery is the high number of underwater mortgages. Unless and until America solves its housing problem once and for all, it’s difficult to imagine an economy that truly feels like a recovery for everyday Americans. Continue reading “Will Underwater Mortgages Sink the Economy?”