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By July 2008, Fannie Mae and Freddie Mac, companies which together owned or guaranteed half of the U.S. housing market, were on the verge of collapse; the Housing and Economic Recovery Act enabled the government to take over and cover their combined $1.6 trillion debt on September 7.
Housing bubbles tend to distort valuations upward relative to historic, sustainable, and statistical norms as described by economists Karl Case and Robert Shiller in their book, Irrational Exuberance. [6] As early as 2003 Shiller questioned whether or not there was, "a bubble in the housing market" [7] that might in the near future correct.
The U.S. entered a deep recession, with nearly 9 million jobs lost during 2008 and 2009, roughly 6% of the workforce. The number of jobs did not return to the December 2007 pre-crisis peak until May 2014. [3] U.S. household net worth declined by nearly $13 trillion (20%) from its Q2 2007 pre-crisis peak, recovering by Q4 2012. [4]
During the crisis of 2007 and 2008, "so many decisions were a choice between unsavory alternatives," Mudd said. ... and the housing market collapse of 2007-2010 made it impossible for them to ...
In July, the housing market had a 4.0-month supply of housing inventory, a 19.8 percent improvement over last year but still below the 5 to 6 months needed for a healthy, balanced market — one ...
Fall: Booming housing market halts abruptly; from the fourth quarter of 2005 to the first quarter of 2006, median prices nationwide dropped off 3.3 percent. [49] Year-end: A total of 846,982 properties were in some stage of foreclosure in 2005. [50] 2006: Continued market slowdown. Prices are flat, home sales fall, resulting in inventory buildup.
However, the full extent of GSE subprime purchases was not known until after the financial crisis of 2007/08. In December 2011 the Securities and Exchange Commission charged 6 ex-executives of Fannie and Freddie with Securities Fraud, and the SEC alleged that their companies held, in reality, over $2 trillion in subprime loans as of June 2008 ...
A housing market crash is characterized by a sudden and severe drop in home values, typically exceeding 20% from peak to trough. The 2008 financial crisis is a prime example. The 2008 financial ...