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The Fed paused raising interest rates because of its concern that an accelerating downturn in the housing market could undermine the overall economy, just as the crash of the dot-com bubble in 2000 contributed to the subsequent recession.
The 2000s United States housing bubble or house price boom or 2000s housing cycle [2] was a sharp run up and subsequent collapse of house asset prices affecting over half of the U.S. states. In many regions a real estate bubble , it was the impetus for the subprime mortgage crisis .
While the causes of the bubble and subsequent crash are disputed, the precipitating factor for the Financial Crisis of 2007–2008 was the bursting of the United States housing bubble and the subsequent subprime mortgage crisis, which occurred due to a high default rate and resulting foreclosures of mortgage loans, particularly adjustable-rate ...
A housing bubble can cause property prices to soar to unrealistic levels, leading to an eventual crash that can have detrimental effects on homeowners and the economy as a whole. In 2008, this ...
Chief economist Mark Zandi of the research firm Moody's Economy.com predicted a crash of double-digit depreciation in some U.S. cities by 2007–2009. [17] [18] Dean Baker of the Center for Economic and Policy Research was the first economist to identify the housing bubble, in a report in the summer of 2002. [19]
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Experts do not expect a housing market crash, due to low inventory, strict lending standards and other factors. ... When the real estate bubble burst, the global economy plunged into the deepest ...
"Credit spreads declined not just for housing, but also for other asset classes like commercial real estate. This tells us to look to the credit bubble as an essential cause of the U.S. housing bubble. It also tells us that problems with U.S. housing policy or markets do not by themselves explain the U.S. housing bubble." [44]