2006-06-13 13:43:56 · 5 answers · asked by patch_tuesday 1 in Business & Finance ➔ Renting & Real Estate
While it is difficult to point blame squarely on one factor, a large percentage of the bubble is attributable to lending institutions who are qualifying unworthy buyers for mortgages with ARMs and other creative and unstable mortgages. With interest rates at 40 year lows a few years ago, Home ownership became a reality for so many people. They've scarfed up properties and driven demand (which increases price). Builders, recognizing this spike in demand are flooding the market with new construction.
As interest rates inch higher, toward 7%, buyers are holding tight (or losing their homes to foreclosure) and sellers are left with depreciating prices and longer days on market.
In short, you can blame the Fed for the interest rates, the banks for taking advantage of it, the consumers for paying exorbitant prices, and builders for flooding the market.
2006-06-13 14:06:31 · answer #1 · answered by Christian T 1 · 8⤊ 0⤋
Incredibly low interest rates caused lots of people to buy houses that otherwise would not have. So...Let's say Alan Greenspan
2006-06-13 13:47:49 · answer #2 · answered by gcbtrading 7 · 0⤊ 0⤋
People that invested in houses on speculation.
2006-06-13 13:47:13 · answer #3 · answered by parshooter 5 · 0⤊ 0⤋
I second that, Greenspan
2006-06-13 13:56:50 · answer #4 · answered by rxy07 1 · 0⤊ 0⤋
The market is the market and it never lies.
2006-06-13 14:36:46 · answer #5 · answered by Jimmy 5 · 0⤊ 0⤋