Housing Market Crashes History - Lifestyle UG Housing Market Crashes History - Lifestyle UG

Housing Market Crashes History

1929 saw Wall Street's most famous crash. It caused the Great Depression. Prices plunged 67%, home values declined, and banks paid out less money after the catastrophe.

This market lost more than half its value by 1933. People believe this crash affected the real estate market until 1960, when prices rose again.

The next housing market was stable until 1974, when the stock market crashed. Inflation rose from 2% to 6% before 1970. This virtually doubled new-home prices.

Up to the end of the 1990s, the market was helped along by an increase in credit as well as the use of additional real estate as collateral.

Due to a savings and loans crisis, interest rates rose, new home construction slowed, and housing prices stayed the same until 1997.

As the 1990s ended and the 2000s began, the US and the rest of the world were in the middle of a housing bubble. 

Mortgage fraud soared, and the economy entered a recession before 2000. Between 1997 and 2003, mortgage rejections fell by half.

The Federal Reserve decreased interest rates from 6.25 to 1% by the end of 2006. Many people saw their loan payments increase by 60% due of this.

Real estate fell in 2007. Many subprime lenders went insolvent, and hundreds of thousands of homes were foreclosed. Government assistance was needed.

2008's housing market meltdown was one of the greatest economic losses since 1929. The economy still feels its impact.

1.28 percent of US homes were under foreclosure during the first half of 2010. Since then, foreclosures have changed, but the market has stabilized.

But home prices have started going up again, and by 2015, the number of notices of foreclosure had dropped to its lowest level in nine years.

From 2012 to 2018, the value of single-family homes steadily went up. In 2018, the average price of a single-family home was $261,600.

COVID-19's spread has sparked fears of another 2007–2008-style crash. People wonder how it would be handled if it happened.

The investment banks now thinks that all parts of the U.S. housing market will be less active by the end of 2022.

New home sales plummeted 22%, existing home sales fell 17%, and housing GDP fell 8.9%. Despite Russia's worsening economy, GDP is only forecast to fall 3% this year.

2023 won't be better. Next year, new home sales could drop 8%, existing home sales 14%, and housing GDP 9.2%.