As we discussed in class about crisis in U.S economy one of the scary and hard part of the reality we need to face is how most of the Americans got themselves in to housing bubble .The buyers believed their dream of owning a home could come true and entrepreneur got themselves in to this careers that were called mortgage broker, real states agent, real state builders and etc. Every 3-4 person was in mortgages, everyone wanted to have a piece of this quick easy money market. However bubble did explod and it is scary what is going on with the housing market in today’s U.S economy. As I read this article http://www.truthout.org/article/part-i-mortgage-crisis-triggers-walk-aways , it explains little bit about the situation in housing market, most of it talks about how people simple did think about losing their job at some point. They did not think about market collapsing and everyone depend on stability which is not always case with the economy. Economy’s circle always goes up and down, but we didn’t expect to be this bad.
“To understand why the next phase of the nation’s housing crisis might mean financially troubled owners just give up and walk away from their homes, look no further than the winding roads and carefully tended lawns of the Piedmont subdivision in the once-booming exurbs of Washington.”
People just walking away giving up their American dream. The reasons for that a lot of families miscalculated their household income. Consumer spent their 99.5% of the personal disposable income in the interest rate and daily consumption .Life was good when economy was good in the U.S, but still many consumers took for granted credit cards and very little saving , to many unnesessary purchases also created some part of the problem that cause consumer debt which links with house payment as well, however the problem is a lot bigger. Most of us forgot to ask the important questions from ourselves , before we dove in to housing bubble:
WHAT WILL HAPPEN IF I LOSE MY JOB, HOW WILL I PAY MY MORTGAGE, HOW WILL I SALE THE HOUSE I BOUGHT AS INVESTMENT IF HOUSING MARKET COLLAPSE?
These are the questions we forgot to answer before we got themselves in to this housing bubble.
“She stirs her tea while leaning on a granite countertop in the gourmet kitchen of her Piedmont home, the one she and her husband can no longer afford, the one they’ve listed for three months now as a short sale: “When we moved in we thought we’d spend the rest of our lives here,” she said, pointing to the expansive rooms with gleaming wood floors.” I used to say, ‘I love our house. It’s so wonderful. We’re going to live here forever.”’ Now I just say, ‘God, I hate this place. I just want to get out of here.'”
How sad is reading these story over and over , I can not stop thinking where this people will live ? what will happen to all this people who have no jobs, who can afford home and with their kids , where will they go ? Is it to late how can we undue situation in U.S economy ?
