...Images such as an ambulance careening down the highway, lights flashing and sirens wailing, or a city block filled with riots and turmoil, are what comes to mind when one thinks of the word crisis. In the minds of many, crisis is synonymous with chaos. The Asheville housing crisis, however, is a crisis of a different nature. It is a silent crisis, one that is the affecting the lives of countless households throughout Asheville. Despite these widespread effects many citizens are turning a blind eye to this crisis, as it is not loud or chaotic one. The housing crisis in Asheville exists as a constant state of a shortage of affordable housing. Affordable in this statement is the key word, as many houses are being developed regularly that sell...
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...What led to the housing crisis? Owning a home can be considered one of the biggest achievements in a person’s life. Whether it’s starting a family, becoming an adult, or running a business, becoming a home owner is an exciting thing for most people. However, the housing crisis of 2007 destroyed many dreams for recent home owners and sent the country into a nationwide panic that led to the biggest recession since the Great Depression. The housing crisis surprised many people since home prices has been steadily increasing. With the positive trend of prices and low mortgage interest rates, it was becoming very easy to receive a loan with low monthly payments. Home prices were increasing so quickly that many home owners chose to refinance to receive...
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...Introduction For a while now, the price of houses in Australia have been rising and it doesn’t seem to be stopping any time soon. In this assessment, I’m going to be walking you through the many problems of Australia’s housing market and will offer solutions as to how we can fix it. Topic question: Generation Z will never be able to purchase their own homes. Why? How have house prices changed in Australia in the last 15 years? When surveyed, 85% of first homebuyers in Australia believed that an affordable home would be one priced at under $600,000 (Crommelin, n.d). However in Sydney, Australia’s most populous city, the median house price is over a whooping $1,000,000 (Crommelin, n.d). While the nation’s overall median house price had already surpassed $660,000 two years ago (The true extent of Australia’s rising property prices, 2015). With house prices quickly rising, it’s become clear to many, especially first home buyers, that the Great Australian Dream of owning your own home is now far off in the distance....
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...According to Wikipedia a housing bubble is a type of economic bubble that occurs periodically in local or global real estate markets. It is characterized by rapid increases in valuations of real property such as housing until they reach unsustainable levels and then decline. Four years into the housing bubble downturn, much of the country remains hopelessly confused about what happened, why it happened and who is to blame. In my research paper I will try and demonstrate what a housing bubble is, some of the reasons for the bubble, was it preventable, how it kept growing, how it burst and how it has affected our economy. By definition a housing bubble is a temporary condition caused by unjustified speculation in the housing market that leads to a rapid increase in real estate prices. As with most economic bubbles, it eventually bursts, resulting in a quick decline in prices. The end of a housing bubble is hard to predict given the fact that economic conditions can change without warning. If a housing bubble swells to an extremely high level, the aftermath of a burst may set the housing market back years. There is little consensus as to the cause of the housing bubble that precipitated the financial crisis of 2008. Numerous explanations exist: misguided monetary policy; a global savings surplus; government policies encouraging affordable homeownership; irrational consumer expectations of rising housing prices; inelastic housing supply. Some explanations...
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...Yang Vang ECO 204 The Cause of the Economic Crisis of 2008 Two thousand eight found the American economy in turmoil. The housing market made a dramatic incline which caused an increase in foreclosures. The major investment banks took a huge fall and the stock markets fare no better either. These were events that leaded up to the economic crisis of 2008. There were three major government incentives that were implemented; the Housing and Urban Development policy, Reinvestment Act, and the Federal’s low interest rate policy. These were the incentives that the government provided that ultimately caused the economic crisis of 2008. During the mid-1900s the government set up regulations to help Americans own homes and this made it possible for lenders to lend money to everyone, regardless of income. This was the American dream that people work so hard for. So when it was made possible by the government regulations, there was no stopping Americans from jumping on that wagon. The home owing process was made possible by HUD (Department of Housing and Urban Development) regulations that required lenders like Fannie Mae and Freddie Mac to accept loans with little or no interest down (Pozen, 2010, p. 28). The loans held by Freddie Mac and Fannie Mae went from 25% in 1990 to 45% in 2001 (Gwartney et al., 2008, pg. 481). They owe about half of the United States’ mortgage markets. Then there was the Reinvestment Act that reduced the conventional lending standards to meet the requirement...
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...condition in New York has accrued over the past decades, which is currently one of the key problems with New York town. Due to this fast growth our current administration, Mayor Blasio has a created eight-point plan, Foundation for an Affordable Housing. Just like the other inhabited town, the rich residents are the ones who get to relish town, while the different social class population, area unit barely extant, living from check to paycheck to pay rent. New York City at this half has the highest rental level, which keep increasing and in constant time the financial gain remains the same. These are some of the rationale why Mayor Bill de Blasio and his administration has created...
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...Federal Government Housing Policy Park University EC301 A crucial role is played by the federal government in supporting the construction of housing financially and offering ownership as well as rental support for households with lower income since the 1930s. In the recent period, numerous programs are being funded by the Congress in order to meet up to the housing requirements for the population that is poor and susceptible. The plans are mainly controlled by the Department of Housing and Urban Development (HUD). The contemporary housing assistance plans involve the comparatively flexible grants for the state as well as the local governments. This is done so as to assist the homeless people, build up reasonably priced housing and offer support to the first-time buyers. This was also done to encourage community development as well as more planned, direct support programs that would assist in providing low-priced apartments and even rental vouchers to the deprived families, managed through quasi-public, local public and the private intermediaries (McCarty & Et. Al., “Overview of Federal Housing Assistance Programs and Policy”). The main objective of the paper is to analyze the housing policies adopted by the federal government related to the mortgage and funding system. With this concern, the discussion of the paper will intend to identify the strategies implemented by the federal government persuade lenders and low-income borrowers in dealing with highly...
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...people were experiencing homelessness. The national rate of homelessness was 20 homeless people per 10,000 people in the general population. The rate for Veterans was 29 homeless Veterans per 10,000 Veterans in the general population” (N.A.E.H, 2013). Due to the lack of affordable housing has resulted in vast and growing homelessness among individuals and families. Homelessness is not only a type of poverty but also a severe state of residential instability. Homelessness is increased by behavioral problems, alteration of mental health rule, differences in health and health care, racial disparities, substance abuse, domestic violence, variation in affordable housing, and lack of social support. Thesis Statement: The deficiency of affordable housing has resulted in widespread homelessness and has become a national problem The" Mission for the National Homeless" has decided to combat homelessness by providing food, shelter and other benefits and services to the homeless people. We will focus on providing housing, food distribution to fight hunger, educational, vocational and other services. We intend to fund our programs through private donations as well as federal and state funding. Problem: “Department of Housing and Urban Development (HUD) defines homelessness as those individuals whose main nighttime residence is in private or public shelters which are meant to provide temporary living accommodations or places which are not intended to be used as regular sleeping place for human...
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...SUBPRIME MORTGAGE CRISIS The U.S. subprime mortgage crisis was a set of events and conditions that led to the late-2000s financial crisis, characterized by a rise in subprime mortgage delinquencies and foreclosures, and the resulting decline of securities backed by said mortgages. What is a subprime mortgage? A subprime mortgage is a type of loan granted to individuals with poor credit histories, who, as a result of their deficient credit ratings, would not be able to qualify for conventional mortgages. Because subprime borrowers present a higher risk for lenders, subprime mortgages charge interest rates above the prime lending rate. There are several different kinds of subprime mortgage structures available. The most common is the adjustable rate mortgage (ARM), which initially charges a fixed interest rate, and then converts to a floating rate based on an index, plus a margin. The better known types of ARMs include 3/27 and 2/28 ARMs. What lead to the US subprime mortgage crisis? ARMs are somewhat misleading to subprime borrowers in that the borrowers initially pay a lower interest rate. When their mortgages reset to the higher, variable rate, mortgage payments increase significantly. This is one of the factors that lead to the sharp increase in the number of subprime mortgage foreclosures in August of 2006, and the subprime mortgage meltdown that ensued. Many lenders were more liberal in granting these loans from 2004...
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...Running Head: CLEAN UP THE HOUSE 1 Clean Up the House: An Analysis of the Housing Crisis and the Endeavor to Lift the US Housing Market Neil Smith Wilmington University MBA 6400 Economic and Financial Environment of Business CLEAN UP THE HOUSE 2 ABSTRACT This is an inquiry of the Housing Crisis that culminated to the Great Recession of 2007-2009. A review of the aspects that led to the Housing Crisis will be considered. The causes that contributed to the Housing Crisis will range from the Community Reinvestment Act of 1977 to the greed and voracity that engulfed the Financial Markets. Such greed maligned the financial markets causing eventual bailouts and measures that the US Federal Government employed to avert a major financial depression. This paper will discuss definite recommendations that will improve the US Housing Market. CLEAN UP THE HOUSE 3 Clean Up the House: An Analysis of the Housing Crisis and the Endeavor to Lift the US Housing Market In today’s world it is generally accepted that a home is the most expensive thing that any American can buy. The idea of home ownership - a chance to own a home - is a dream fulfilled for many. To have a piece of property and call it your own is reflected...
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...Subprime Mortgage Crash Many factors contributed to the subprime mortgage crisis, a disruptive economic downturn that its severity can be compared to the Great Depression. Only federal intervention prevented a possible collapse of the world economic system. Ironically, it can be said that federal intervention in the mortgage industry led to the 2008 collapse. By backing risky mortgages, the government created a new systemic financial contagion that began in the housing market, moved through financial and investment markets, and created a loss of confidence in the financial system on which our economy is based. The following conditions created the crisis: 1. For the government, home ownership kept neighborhoods safe and clean because neighbors, in protecting their property, also protected neighborhoods. Government backed loans were offered to otherwise at risk lenders home ownership to strengthen communities, especially low income communities. 2. The government encouraged lenders to extend riskier loans to those more economically disadvantaged and therefore less likely to honor debt obligations. By guaranteeing the loans, the government allayed concerned bankers and other lenders. Fannie Mae and Freddie Mac, backed by the federal government, allowed financial institutes to sell mortgages as secure investments, creating a new financial production, mortgage securitization. 3. Homeowners saw that housing was booming since the late 1990s and buying a home was a logical route to...
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...Homelessness is the big issue for every country which give rise to rough sleeping on streets, parks or grounds which not only affect their health but also have a bad impact on their mental stability. Many of them are also experiencing violence, abuse , injuries and deaths. Rough sleeping is the mark of housing crisis. Individuals those who are homeless from a longer period, the situation of housing crisis is worsened due to the effects of mental illness, unemployment, substance and child abuse. Homeless people also suffering from so many disadvantages, getting the home is the half challenge. ‘Staying housed’ is equally difficult. Rising of homelessness has blown away the minds of government. Thus, the Victorian government stated two year...
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...The sub-prime crisis of has led to a financial crisis in 2008-2009 that impacted many countries around the world. Discuss the cause of the sub-prime crisis and the major parties responsible. A number of parties were responsible for the sub-prime crisis during the period of 2008 to 2009. This essay will be discussing the parties responsible for the sub-prime crisis and how the individual party’s action causes the others to step deeper into the problem. As define by investopedia, sub-prime is “a classification of borrowers with a tarnished or limited credit history. Lenders will use a credit scoring system to determine which loans a borrower may qualify for. Subprime loans carry more credit risk, and as such, will carry higher interest rates as well.” The US subprime mortgage crisis was the catalysis of the finical crisis and subsequently cause the recession that began in 2008. The cause of sub-prime crisis arise from sub-prime loans or also know as sub-prime mortgage, the growth of this loan started expanding during the 1990s and such load is popularly seen in auto (car) loans, home equity (housing loans) and mortgage lending. Sub-prime loans are higher-risk loans labeled “B”, “C” and D credits, where “D” being the “worst”, resulting in a higher interest rate, which also mean a higher risk to the lenders. But it seem not to be a hindering problem, from the point of view of the finical institute who lend out the money, which will be explained later in this essay. In...
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...the financial crisis in the United States last year, there is a lot of fear that China is headed for a similar crisis. If the bubble burst, China’s economic growth is likely to slow or decline. Since the world is looking to China to lead economic growth, such down turn will have greater implication for the world economic recovery. The persistent real estate demand in China combined with the stimulus plans that were rolled out during the financial crisis have been boosting China’s economy, fueling the price growth in the Chinese housing market: this is one of the key reasons why China did not suffer significant loss during the financial crisis in 2009. Having learnt from the Asian Financial Crisis in 1997, the Chinese government has already begun to take actions to deal with the overheated housing market. At the end of last year, the Chinese government, central and local, imposed additional sales tax on homes sold within five years of purchase and raised the down payment requirements for families buying a second house or more with bank loans. The Chinese Central Bank had also raised the deposit reserve requirement ratio for banks for the second time in last month. Going forward, if the housing price growth persists, the Central Bank will need to take more drastic measures to control this growth, and reduce speculations. The article points out that the biggest real estate problem in China currently is access to affordable housing. The recent increase in housing prices has outpaced...
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...Applied Economic Theory United States Mortgage Crisis After rising at an annual rate of nearly 9 percent from 2000 through 2005, house prices have decelerated, even falling in some markets. At the same time, interest rates on both fixed- and adjustable-rate mortgage loans moved upward, reaching multi-year highs in mid-2006. Some subprime borrowers with ARMs, who may have counted on refinancing before their payments rose, may not have had enough home equity to qualify for a new loan given the sluggishness in house prices. In addition, some owners with little equity may have walked away from their properties, especially owner-investors who do not occupy the home and thus have little attachment to it beyond purely financial considerations. Regional economic problems have played a role as well; for example, some of the states with the highest delinquency and foreclosure rates are among those most hard-hit by job cuts in the auto industry. The rate of serious delinquencies--corresponding to mortgages in foreclosure or with payments ninety days or more overdue--rose sharply during 2006 and recently stood at about 11 percent, about double the recent low seen in mid-2005.3 The rate of serious delinquencies has also risen somewhat among some types of near-prime mortgages, although the rate in that category remains much lower than the rate in the subprime market. The rise in delinquencies has begun to show through to foreclosures. In the fourth quarter of 2006, about 310,000...
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