The Financial Crisis of 2008

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The financial crisis of 2008, which has also been referred to as The Great Recession and the Global Financial Crisis of 2008, began with the downfall in the housing market in the United States. Thee were many factors that played into this housing market turn for the worst during this time. Some of these factors included: subprime loans, the housing bubble that peaked in 2005-2006, government policy and regulation, and faulty mortgages. This housing market turn affected more than just the housing market with all the personal and government additions involved. In turn the unemployment rate went down with this event, evictions and foreclosures of houses sky rocketed, faulty and risky loans were also issued that created problems in the banking system. This lead to many businesses failures, and the recession was not expected, so it began to hit the economy and United States hard. The United States housing bubble was like many other housing bubbles that occurred nation wide. The housing bubble was caused by rapid increases in the value or real estate and homes, and lower income individuals and families were buying larger homes. There were lenient credit conditions that will be discussed later in the paper that helped build this ability for everyone to now buy a home. With the economic affordability of development and homes being where it was starting in 2005-2006 where the housing bubble started to peak, land developers started buying more land, and building more speck and individualized homes while making higher profits than they had in previous years. We can see the direct affects of the housing market bubble by looking at the numbers of homes sold in 2005-2007. In 2005 over 1,283,000 family homes were sold throughout the U.S. hous... ... middle of paper ... ...ere lax Works Cited http://www.economist.com/news/schoolsbrief/21584534-effects-financial-crisis-are-still-being-felt-five-years-article http://spectator.org/articles/42211/true-origins-financial-crisis http://economix.blogs.nytimes.com/2009/02/25/deflation-1929-vs-today/?_php=true&_type=blogs&_r=0 http://oregoneconomicanalysis.com/2012/09/24/checking-in-on-financial-crises-recoveries/ http://www.economist.com/news/schoolsbrief/21584534-effects-financial-crisis-are-still-being-felt-five-years-article http://www.britannica.com/EBchecked/topic/1484264/The-Financial-Crisis-of-2008-Year-In-Review-2008 http://www.nytimes.com/2011/01/26/business/economy/26inquiry.html http://www.nytimes.com/2011/01/26/business/economy/26inquiry.html http://en.wikipedia.org/wiki/Financial_crisis_of_2007%E2%80%9308#Subprime_lending http://en.wikipedia.org/wiki/Great_Recession

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