Free Housing Bubble in the United States Essay Sample

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I have chosen the Housing Bubble in the United States because it is the most recent and the biggest bubble in history. The prices of houses peaked early on 2005, started waning in 2006 and might not up till now have hit bottom. The bubble affected many areas of the country's housing market, such as areas of Arkansas, Arizona, California, Connecticut, Colorado, Florida, Georgia, Idaho, Illinois, Indiana, Hawaii, Maryland, Michigan, Nevada, Massachusetts, New Hampshire, Ohio, Oregon, Rhode Island, New Jersey, Tennessee Virginia and Utah.

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To be investigated are the Effects of the housing bubble

Home price index of experienced the biggest prices drop in record. Augmented rates of foreclosure in 2006-2007 amongst home owners in the united states resulted into a crisis in August 2008 for the Alt-A, subprime, collateralized debt obligation (CDO), credit, mortgage, foreign bank and hedge fund markets. In 2007, the United States secretary of the treasury referred to the collapsing housing bubble as the "the most significant risk to our economy." It's important to note that a collapse of the united states housing bubble can directly impact valuations of homes, mortgage markets, real estate, home providers retail outlets, Wall Street hedge funds  that are held by established institutional investors, home builders, and foreign banks, enlarging the possibility of a countrywide recession. For the fear of collapsing credit and housing markets countrywide, President George W. Bush together with Ben Bernanke, the Chairman of the Federal Reserve announced a limited bailout of the country's home market for homeowners who could not be able to settle their mortgage amounts overdue.

In 2008, the government allocated more than $900 billion to rescues and special loans associated with the United States housing bubble, with more than half being allocated to the quasi-government societies of Freddie Mac, Fannie Mae and the Federal Housing Administration.

The Housing Bubble in the United States is a function of the Market forces of Demand and Supply hence the Quantitative Demand analysis.