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Housing bubble burst in america during the economic depression

Save With every up there comes the inevitable and unavoidable down.

It is the nature of the cyclical beast called the U. The United States economy is in its second longest-running expansion in history, which has come on the heels of the Great Recession.

Historically, with each expansion, there have been defining factors deciding when the ups start to descend. The severity of these defining factors determines the depth of the recession on the overall economy.

During the 1990s, the U. The dot-com bubble eventually burst — the market crashed — followed by a string of high-profile bankruptcies, ultimately resulting in a mild recession, lasting a few months.

Australian housing crash is a possibility that should worry us all

Ultimately, the bubble did what it always does, it burst, and home values declined across the country. The Great Recession followed in December 2007 — it was long, tough and affected the economy on a global scale with all-time high unemployment rates. The bankruptcy, and ultimate bailouts, of organizations deemed stereotypically too big to fail.

Then, slowly, a recovery gathered and the U.

Lending institutions continue to keep the trend of tight credit, and the Federal Reserve, until only recently, started raising rates after seven years of inaction on lending rates. There is an obvious trend of expansion, bubble burst, followed by recession. The past five recessions occurred within 15 months of an inverted yield curve.

These standing predictions lead to a shallow recession within the next 18-24 months. Private loans tend to carry a much higher interest rate, which in turn, could be difficult to make payments based on initial post-college earnings. With the economy there are a multitude of variables. It is never just a single item or event that drives recession or expansion.

The only certainty is that the current expansion will eventually come to an inevitable and unavoidable end, resulting in a recession. This story cannot be published, broadcast, rewritten or redistributed without prior authorization from the TH.