Why the housing economy should brace for impact.
Why the housing economy should brace for impact. On this episode, Byron and Nicole discuss economic shock hitting the housing market and why it’s getting bigger.
Home prices have jumped nearly 20% and the Federal Reserve Bank of Dallas warned this week of “a brewing U.S. housing bubble” with trends reminiscent of those that culminated in the historic financial crisis of 2008. For Americans buying or selling a home, what should they expect? NBC’s Ali Vitali reports in this week’s Sunday Focus
What is a housing bubble?
From Wikipedia, the free encyclopedia
A housing bubble (or a housing price bubble) is one of several types of asset price bubbles which periodically occur in the market. The basic concept of a housing bubble is the same as for other asset bubbles, consisting of two main phases. First there is a period where house prices increase dramatically, driven more and more by speculation. In the second phase, house prices fall dramatically. Housing bubbles tend to be among the asset bubbles with the largest effect on the real economy, because they are credit-fueled, because a large number of households participate and not just investors, and because the wealth effect from housing tends to be larger than for other types of financial assets.
Housing bubble definition
A housing bubble occurs when real estate demand outpaces supply, causing the average price of properties for sale to rise – often at a high or alarming rate. What’s more, the phenomenon can also impact home buyers and sellers when it occurs, as they consider whether now is a good time to buy or sell a house