Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Coronavirus: UK Parents Demand ALL Schools OPEN September, 7 Million Children Abandoned by Teachers - 9th Aug 20
Computer GPU Fans Not Spinning Quick FIX - Sticky Fans Solution - 9th Aug 20
Find the Best Speech Converter for You - 9th Aug 20
Silver Bull Market Update - 7th Aug 20
This Inflation-Adjusted Silver Chart Tells An Interesting Story - 7th Aug 20
The Great American Housing Boom Has Begun - 7th Aug 20
NATURAL GAS BEGINS UPSIDE BREAKOUT MOVE - 7th Aug 20
Know About Lotteries With The Best Odds Of Winning - 7th Aug 20
Could Gold Price Reach $7,000 by 2030? - 6th Aug 20
Bananas for All! Keep Dancing… FOMC - 6th Aug 20
How to Do Bets During This Time - 6th Aug 20
How to develop your stock trading strategy - 6th Aug 20
Stock Investors What to do if Trump Bans TikTok - 5th Aug 20
Gold Trifecta of Key Signals for Gold Mining Stocks - 5th Aug 20
ARE YOU LOVING YOUR SERVITUDE? - 5th Aug 20
Stock Market Uptrend Continues? - 4th Aug 20
The Dimensions of Covid-19: The Hong Kong Flu Redux - 4th Aug 20
High Yield Junk Bonds Are Hot Again -- Despite Warning Signs - 4th Aug 20
Gold Stocks Autumn Rally - 4th Aug 20
“Government Sachs” Is Worried About the Federal Reserve Note - 4th Aug 20
Gold Miners Still Pushing That Cart of Rocks Up Hill - 4th Aug 20
UK Government to Cancel Christmas - Crazy Covid Eid 2020! - 4th Aug 20
Covid-19 Exposes NHS Institutional Racism Against Black and Asian Staff and Patients - 4th Aug 20
How Sony Is Fueling the Computer Vision Boom - 3rd Aug 20
Computer Gaming System Rig Top Tips For 6 Years Future Proofing Build Spec - 3rd Aug 20
Cornwwall Bude Caravan Park Holidays 2020 - Look Inside Holiday Resort Caravan - 3rd Aug 20
UK Caravan Park Holidays 2020 Review - Hoseasons Cayton Bay North East England - 3rd Aug 20
Best Travel Bags for 2020 Summer Holidays , Back Sling packs, water proof, money belt and tactical - 3rd Aug 20
Precious Metals Warn Of Increased Volatility Ahead - 2nd Aug 20
The Key USDX Sign for Gold and Silver - 2nd Aug 20
Corona Crisis Will Have Lasting Impact on Gold Market - 2nd Aug 20
Gold & Silver: Two Pictures - 1st Aug 20
The Bullish Case for Stocks Isn't Over Yet - 1st Aug 20
Is Gold Price Action Warning Of Imminent Monetary Collapse - Part 2? - 1st Aug 20
Will America Accept the World's Worst Pandemic Response Government - 1st Aug 20
Stock Market Technical Patterns, Future Expectations and More – Part II - 1st Aug 20
Trump White House Accelerating Toward a US Dollar Crisis - 31st Jul 20
Why US Commercial Real Estate is Set to Get Slammed - 31st Jul 20
Gold Price Blows Through Upside Resistance - The Chase Is On - 31st Jul 20
Is Crude Oil Price Setting Up for a Waterfall Decline? - 31st Jul 20
Stock Market Technical Patterns, Future Expectations and More - 30th Jul 20
Why Big Money Is Already Pouring Into Edge Computing Tech Stocks - 30th Jul 20
Economic and Geopolitical Worries Fuel Gold’s Rally - 30th Jul 20
How to Finance an Investment Property - 30th Jul 20
I Hate Banks - Including Goldman Sachs - 29th Jul 20
NASDAQ Stock Market Double Top & Price Channels Suggest Pending Price Correction - 29th Jul 20
Silver Price Surge Leaves Naysayers in the Dust - 29th Jul 20
UK Supermarket Covid-19 Shop - Few Masks, Lack of Social Distancing (Tesco) - 29th Jul 20
Budgie Clipped Wings, How Long Before it Can Fly Again? - 29th Jul 20
How To Take Advantage Of Tesla's 400% Stock Surge - 29th Jul 20
Gold Makes Record High and Targets $6,000 in New Bull Cycle - 28th Jul 20
Gold Strong Signal For A Secular Bull Market - 28th Jul 20
Anatomy of a Gold and Silver Precious Metals Bull Market - 28th Jul 20
Shopify Is Seizing an $80 Billion Pot of Gold - 28th Jul 20
Stock Market Minor Correction Underway - 28th Jul 20
Why College Is Never Coming Back - 27th Jul 20
Stocks Disconnect from Economy, Gold Responds - 27th Jul 20
Silver Begins Big Upside Rally Attempt - 27th Jul 20
The Gold and Silver Markets Have Changed… What About You? - 27th Jul 20
Google, Apple And Amazon Are Leading A $30 Trillion Assault On Wall Street - 27th Jul 20
This Stock Market Indicator Reaches "Lowest Level in Nearly 20 Years" - 26th Jul 20
New Wave of Economic Stimulus Lifts Gold Price - 26th Jul 20
Stock Market Slow Grind Higher Above the Early June Stock Highs - 26th Jul 20
How High Will Silver Go? - 25th Jul 20
If You Own Gold, Look Out Below - 25th Jul 20
Crude Oil and Energy Sets Up Near Major Resistance – Breakdown Pending - 25th Jul 20
FREE Access to Premium Market Forecasts by Elliott Wave International - 25th Jul 20
The Promise of Silver as August Approaches: Accumulation and Conversation - 25th Jul 20
The Silver Bull Gateway is at Hand - 24th Jul 20
The Prospects of S&P 500 Above the Early June Highs - 24th Jul 20
How Silver Could Surpass Its All-Time High - 24th Jul 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

U.S. Housing Mortgage Bubble About to Burst Again?

Housing-Market / US Housing Nov 24, 2013 - 06:45 PM GMT

By: Pravda

Housing-Market

A new mortgage crisis is brewing on the real estate market, foreign experts believe. Judging by how briskly housing prices have been rising in the largest economies of the world - China and the U.S. - the mortgage "bubble" may burst very soon. The number of foreclosures in the United States has been growing steadily. Why do the authorities take no efforts to prevent another collapse of the housing market?


The volume of abandoned property started to grow rapidly in some districts of the U.S. in September of this year. Like six years ago, many houses were abandoned after mortgage payments had been stopped. Like in 2007, experts started talking about the brewing crisis on the housing market, which, as we remember, actually occurred and gave impetus to the global economic crisis.

The fears of Western experts are based on the rising cost of housing in the countries with leading economies - the U.S. and China. For example, in China, the rise in prices on new homes reached 10.5-11 percent compared with the previous year, according to various research firms. In the U.S., from August 2012 till August 2013, housing prices rose by 12.8 percent, and approached the peak, which heralded the previous crisis. The demand on real estate remains high against the background of loyal mortgage lending. Does this mean that history repeats itself? Are Western experts correct, when saying that the "bubble" is about to burst soon?

"Generally speaking, home sales have always been an indicator whether the economy grows, or remains in stagnation after the crisis. A rise in housing prices, activation of the housing market, increased demand for housing, was always seen as a positive phenomenon. Seemingly, this is one conclusion from what is seen now, - deputy director of the Institute for the USA and Canada, Valery Garbuzov told Pravda.Ru. - But on the other hand, all this is very much linked to mortgage and the development of mortgage. And, of course, there are fears that it could bring back the situation that appeared several years ago. Again, there will be a crisis, caused by this disorganized, unregulated mortgage lending. Many experts do believe that this is a risk indeed."

"At the same time, the situation in 2008 can not copy itself. Most experts agree that the amount of positive news in terms of the real estate market outweighs the risks." It should also be remembered that the state does not have many ways to affect the market and economy. Basically, it is the Federal Reserve System, which, by increasing or lowering interest rates, can affect economy and either lower or raise the purchasing power of the population, enhancing economic activity.

"I think it is high time to revitalize this demand, and the state, of course, should stimulate demand, although it is difficult to do. This is evidenced by the growing federal budget deficit of the United States. But there is hope that the market will work a normal way, and then this situation will recover over time," said Valery Garbuzov, thereby refuting the predictions of pessimists about the mortgage crisis, which may occur in case the U.S. authorities pump money in the economy and encourage investment in risky assets.

"Every success has its price, and in this case, the success of the revitalization of market demand, as well as the price of success implies the risk of the mortgage crisis to strike again. It may or may not be. Optimists hope that it will pass them by," the expert concluded.

While another "bubble" is growing in the U.S., in Russia, housing becomes more expensive by leaps and bounds. Experts, however, say that the Russian real estate market depends on the inflation rate, and unlike in the U.S., where a mortgage crisis may occur, there is no limit for price growth in Russia.

"There is no limit in this process for one simple reason - inflation, - says the president of the Moscow Guild of Realtors, Chairman of the Management Board of Best Real Estate, Grigory Poltorak. - In Russia, the inflation rate is higher than in other countries. Prices grow because money is getting cheaper. Apparently, there is an economic law. Over the long term, there are currencies subject to inflation. Money looses value, and prices grow. By that state of things, I would say that real estate prices in Russia are not growing at all."

Maria Snytkova

Pravda.ru

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Pravda Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules