US Housing Crisis that Greenspan Built
By ebizniz on September 1, 2007 - 6:15pm
A blog posting by Vancouver Home Mortgage:
It was reported in The Financial Post on Sept 01,2007 in an article "Ultra-low Fed rates stoked housing boom: Taylor"
The bursting of the tech bubble and September 11/2001 terrorist attack on World Trade Center has resulted in Greenspan aggressively cutting interest rates and holding them too low for too long. The asset inflation had resulted in the US housing boom built with too much liquidity and un-regulated mortgage lending. With the collapse of the housing market, US home owners lost billions of dollars in their property asset values all over the US. And, the bottom is not in sight yet!
The recent injection of liquidity by the US and the likely reduction in interest rates will not solve the current problem on US housing deflation. The correction in house prices will take many years to unwind until consumer confidence returns to the market.
The housing problem in the US was explained superbly by the blog posting by Dr. Housing Bubble on the housing and real estate problem in Los Angeles.
