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Will the housing crash and economic collapse happen in 2018?
The housing market indicated that a crisis was coming in 2008. Is the same thing happening once again in 2018? For several years, the housing market has been one of the bright spots for the U.S. economy. Home prices, especially in the hottest markets on the east and west coasts, had been soaring. But now that has completely changed, and home sellers are cutting prices at a pace that we have not seen since the last economic collapse and stock market crash. In case you are wondering, this is definitely a major red flag for the economy.
Even though the stock market has been booming, everything else appears to indicate that the U.S. economic collapse is imminent. If home prices continue to fall precipitously, that is going to put even more pressure on the system, and it won’t be too long before the housing crash will happen.
The storm clouds are growing more ominous with each passing day, and at some point time will run out.
What is a ‘Housing Market Crash’
Despite housing being a secure asset, the housing market can be prone to bubbles and periods of rapidly falling prices. In recent years, the period 2005-09 saw a prolonged and significant fall in house prices in both the US and Europe.
A housing market crash can be precipitated by a change in economic fundamentals (higher interest rates, lower growth) and/or a change in market sentiment confidence turning to pessimism.
What causes housing crashes?
Essentially a period of falling house prices occurs when there is a fall in demand for buying houses/more people putting houses on the market. The main reasons for this include: A rise in interest rates. Mortgage payments can take 20-50% of a homeowners disposable income. A small rise in rates can increase the cost of mortgage payments and make buying a house less affordable. If homeowners take out fixed rate mortgages, they can be insulated from interest rate rises for 2-10 years (depending on the term). In the UK about 50% of mortgages are variable rate mortgages, so homeowners will feel the effects of higher.
Stock Market Crash: Definition, Causes:
Stock market crashes are an unfortunate fact of life on Wall Street, with eight major market crashes in the past 100 years, led by the stock market crash of 1929. That stock market crash triggered the Great Depression — often cited as the worst economic period in U.S. history.
Stock market crashes occur after significant and rapid declines in the stock market over a short period of time — even in one day, in some cases. Any one-day market decline of 10% or more in a single day is generally described as a market crash.
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Music: CO.AG Music https://www.youtube.com/channel/UCcavSftXHgxLBWwLDm_bNvA
Thanks for the script to Michael Snyder, author of theeconomiccollapseblog.
This video made for educational purposes.