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2008 Housing Market Crisis Essay

443 Words2 Pages

In the fall of 2008, the United States financial markets suffered a loss of value near 30%, making the housing market crisis one of the most terrible periods U.S. history. Mortgage and credit crisis, foreclosures, and the breakdown of banks characterized this period. Beginning in the 1999, the growth of the subprime mortgage market played an important role for what was to happen in 2008. The government's involvement of the crisis, through the Federal Reserve and Federal Housing Administration, can be seen by the relationship of mortage rates and house prices. The banks also played a significant role by passing mortgages to investment banks on Wall Street. After the crisis in 2008, the U.S. government made guarantees to gain the public’s trust once again. By looking at past market failures, people will be able to learn and understand the causes and try to prevent them from happening again. . Keywords: Mortgage, Foreclosures, Banks, Government Housing Market Crash: Causes and Prevention …show more content…

Beginning in the 1999, the growth of mortgage-backed securities played an important role for what was to happen in 2008. The rise of the subprime mortgage market gain popularity among commercial investors but it soon became obvious that involvements with the mortgage market meant huge trouble for the U.S. financial market. Main factors that contributed to the decline include, the high-risk mortgages, government’s easy-money policy and mortgage insurance, and the failure of banks. The economy in general faced a decline and when the crash was over. To alleviate the pressure that was built up, the government made promises to the public to help prevent such as crisis from happening

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