Is the housing market collapsing in the US?

Question

Seems to be quite a bit about american sub-prime mortgage problems and US housing market over-supply in the specialist newspapers/magazines over here in the UK. Any views from the states?

Answer 1

i think my house is collapsing ..uk

Answer 2

The housing market won't "collapse" (land is a scarce resource).......but if you work for a sub-prime lender I'd start looking for another job.

Subprime lenders made risky loans at adjustable mortgages to people who were poorly qualified. When interest rates rose, and the housing market cooled, these people aren't able to pay their mortgage. So they lose their home, the lender forecloses (and doesn't get back the entire amount), the lender has no cash flow and shuts their doors.

They're guessing that about 3% of total mortgage debt out there is bad debt; almost all of it is attributable to subprime debt. It is going to be a little painful but nothing like the S&L crisis in the 1980s ---- one has to remember that 70% of US households are homeowners.

Answer 3

Not collapsing -- there is certainly a correction in the market -- people are still buying houses, but average prices have been dropping a bit and home builders have built up too much inventory. Meanwhile, yes, the firms that specialized in lending to people with poor credit are facing challenges; it's likely some will go out of business.

But those are nationwide averages -- a key fact is that the housing market is highly regional: people in central Texas don't care that there are too many unsold houses in New York.

So yes there is a correction occurring in several localities but I doubt it's the lurid calamity that the financial press would so dearly love to see, the bastards.

Answer 4

Housing Markets will collapse anywhere in the world when the establishment ,engineers it . That banks do this by put in up interest rates unfortunately most of the poor suckers cant see past owning property because their going to make big bucks . until the hegomonists pull the carpet and the banks get all the property back
Its like a game of Monopoly . God knows what is going to happen to the world economy after the bird Flu , perhaps it Will get rid of some of the crude like the black death we must always look on the bright side

Answer 5

It is an effect of the rising interest rates.