The housing market or the housing bubble, which burst did affect everyone nationally and local has been hit by the economy .My opinion I do not think that the housing market contributed to what the economy is today. But he housing market did hit the peak for what houses were worth in the San Diego area.( And this was all caused by the actions of lenders are directly attributable to the policies of the Federal reserve when credit is cheap, why not loan money more recklessly to individuals who normally would not qualify?) Even with higher default rates, lenders could make huge profits simply through volume. Subprime lending is a symptom of the housing bubble, not the cause of it.
Federal Reserve credit also distorts mortgage lending through Fannie Mae and Freddie Mac, two government schemes created by Congress supposedly to help poor people. Fannie and Freddie enjoy an implicit guarantee of a bailout by the federal government if their loans default, and thus are insulated from market forces. This insulation spurred investors to make funds available to Fannie and Freddie that otherwise would have been Invested in other securities or more productive endeavors, thereby fueling the housing boom. Are house where we live did go up in value and I noticed in 2005 there were a many different reality companies and mortgage brokers making calls to asking about refinancing. We even after we did refinance our home we still got calls from different companies saying you can still refinance and take money out for improvements to your home or take a vacation. This was not the normal practice what all these lenders and banks should be doing. We did not take the advice of any of those companies because it just sounded too good of a deal and could turn it to a big disaster and to me this was just lots of trouble and eventually home owners...
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