The US housing bubble is part of the overall economic bubble in the United States. The housing bubble will have an effect on not only house prices but also other areas. There are many should be taken into account when looking at the US housing bubble.
What a housing bubble is would be the best place to start. Any country in the world that has a housing market will be able to have a housing bubble. When housing prices rapidly and continuously increase until they cannot be sustained is what is known as a housing bubble. Housing bubbles in Hong Kong, the United Kingdom and Spain coincided with the housing bubble felt in the US.
The identification of a housing bubble is thought to only be possible in hindsight. The American housing bubble is thought to have been spotted as long ago as 2004. There were many articles written by various people identifying the bubble and some of the reasons for it. Due to the fact that the bubble coincided with bubbles in other countries many people believed that it would have to be viewed in a global sense and not only in the United States.
The fact that there was a housing bubble was not being admitted by a number of high powered people in America. Influential people in the financial world did receive warnings from various people about the dangers involved in over extending themselves. The fact that many companies were going to eventually suffer from this was predicted by analysts in 2006.
The housing bubble did have a number of side effects. One of the side effects was the increase in building of new houses. As the market was up more people built houses to sell at high rates. The price of houses made many people leave the high priced areas in many metropolitan areas. This saw populations in commuter towns rapidly increase.
No housing bubble will be able to continue indefinitely and the US bubble is exactly the same. The beginning of the end came in 2007 when the mortgage industry took a hit due to the increase in foreclosures. This was just the beginning of not only the collapse of the housing bubble but also many other areas of the global economy.
The US housing bubble was only one of the many aspects of the countries economics. Like all countries the United States’ housing bubble was bound to break at some point even if there were some people who did not want to acknowledge it at all.