Originally published December 18 2005
Experts wonder when the U.S. housing bubble will come to an end
by Mike Adams, the Health Ranger, NaturalNews Editor
Monsters and Critics has run an article devoted to the current housing bubble in the United States, and many experts have cited evidence, including flattering sales figures, that suggests the market will soon experience a major downturn.
This has sparked a debate in U.S. media about whether the boom is gradually reaching its end and whether the speculative bubble could break, with terrible results for some Americans and the entire U.S. economy.
Real estate and housing construction heated up as a result of extremely low interest rates, a policy promoted by Federal Reserve Chairman Alan Greenspan and other members of the reserve board as a remedy for Wall Street's ills, including the decline in technology stocks and the effects of the 2001 terrorist attacks.
Over the last several years, mortgages that require no down payment and variable-rate mortgages have spurred on the real estate boom and helped Americans with poor credit records become homeowners.
For some it's their only valuable asset and the only thing they have to support themselves in retirement.
However, many Americans have used rapidly rising real estate prices to take money out of their homes by refinancing their debt.
Greenspan estimated Americans have taken 600 billion dollars out of their homes through refinancing and used the money to satisfy their spending habits.
The money has been spent on cars, vacations, household fixup projects and other acquisitions - the type of consumer spending that accounts for about 70 per cent of the U.S. economy.
If Americans suddenly don't have additional income, it could be harmful for individual finances, retail business and the overall U.S. economy.
The total amount of money owed by Americans is rising - well into the trillions of dollars, including about 8 trillion in mortgages.
The umbrella organization representing U.S. real estate agents expects a 'soft landing' for the real estate market.
Real estate agent Merzad Ranjbaran of Bethesda, Maryland, told the Washington Post he's been trying to sell a one-bedroom condominium in downtown Washington for a year.
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