Housing policy Essay Example | Topics and Well Written Essays - 2750 words

Housing policy - Essay Example From the graphical representation, it is noticed that US real estate business was highly affected due to the financial crisis. What originated as a crisis in the US housing and mortgage markets; had infected other sectors and spread globally. The financial troubles that the worldwide economies face today came on the heels of two bubbles, one in the housing market and the other one in the credit markets. A plethora of several dissimilar factors added to the housing market bubble and also those tangled with the credit market bubble. The inflating of the housing bubble can be considered by home sales and home prices. Housing sales and prices had been rising at a quick speed since the early-mid 1990s, until the recession began in 2006 - 2007. Several household transactions indices have turned down from 10 % to 30 % worldwide and by as much as 40% or further in certain markets. Still the additional reserved losses in household worth turn out to be more important when an individual believes how household procurement is financed. Since housing sector is extremely leveraged, a preliminary 20% equity stake in a household, acquired over the most recent years have been in all possibility wiped out. Therefore, the perception that household ownership is a better source of revenue of wealth gathering has been a thoroughly misleading thought (Bardhan & Et. Al., â€Å"The Housing Problem and the Economic Crisis: A Review and Evaluation of Policy Prescriptions†). The subprime crisis crashed household dwellers financially which included both owners as well as renters. Proprietors with no mortgage debt were probable to be in the slightest susceptible situation, although if they had designed to comprehend their asset gains, these had lost the worth. Of the 112 million household units in the US, there were 75.5 million landlords engaged in 2007. Of these, 23.9 million houses were mortgage free that tentamounted to lesser than 1/3 of the