Housing Bubble

The housing bubble began in the late 1990 to early 2000, when inflation-adjusted house prices starting to move up sharply.  In fact, the average U.S. home price doubled in value on an inflation-adjusted basis from 2000 to 2006.  It is widely suggested that the government’s efforts to promote homeownership is to blame for this – 1992 legislation required the government-backed mortgage investors Fannie Mae and Freddie Mac to guarantee more loans for people with shaky credit and an inability to make substantial down payments.

The housing bubble began to deflate in 2006, when housing sales began to  decline.

The housing bubble burst in late 2007 when the number of homes sold in the United States  dropped to 776,000.  This was a 40 percent drop in home sales from  2005 when 1,283,000 sold.

Your thoughts and comments are appreciated