利用者:Penn Station/draft2
xxx(英: United States housing bubble)
The United States housing bubble is an economic bubble affecting many parts of the United States housing market, including areas of California, Florida, Nevada, Arizona, Oregon, Colorado, Michigan, the Northeast Corridor, and the Southwest markets. At the national level, housing prices peaked in early 2005, started to decline in 2006, and may not yet have hit bottom. On December 30, 2008 the Case-Shiller home price index reported its largest price drop in its history. [1] Increased foreclosure rates in 2006–2007 among U.S. homeowners led to a crisis in August 2008 for the subprime, Alt-A, collateralized debt obligation (CDO), mortgage, credit, hedge fund, and foreign bank markets.[1] In October 2007, the U.S. Treasury Secretary called the bursting housing bubble "the most significant risk to our economy."[2]
Housing bubbles may occur in local or global real estate markets. In their late stages, they are typically characterized by rapid increases in the valuations of real property until unsustainable levels are reached relative to incomes, price-to-rent ratios, and other economic indicators of affordability. This may be followed by decreases in home prices that result in many owners finding themselves in a position of negative equity—a mortgage debt higher than the value of the property. The underlying causes of the housing bubble are complex. Factors include historically low interest rates, lax lending standards, and a speculative fever.[1][3][4][5][6] This bubble may be related to the stock market or dot-com bubble of the 1990s.[7][8][9][10][11] This bubble roughly coincides with the real estate bubbles of the United Kingdom, Hong Kong, Spain, Poland, Hungary and South Korea.en:Template:Fact
![](http://upload.wikimedia.org/wikipedia/commons/thumb/6/6c/Shiller_IE2_Fig_2-1.png/300px-Shiller_IE2_Fig_2-1.png)
Bubbles can be definitively identified only in hindsight after a market correction,[12] which in the U.S. housing market began in 2005–2006.[13][14][15][16][17][18][19] Former U.S. Federal Reserve Board Chairman Alan Greenspan said "We had a bubble in housing",[20][21] and also said in the wake of the subprime mortgage and credit crisis in 2007, "I really didn't get it until very late in 2005 and 2006."[22] The mortgage and credit crisis was caused by the inability of a large number of home owners to pay their mortgages as their low introductory-rate (sub-prime) mortgages reverted to regular interest rates. Freddie Mac CEO Richard Syron concluded, "We had a bubble",[23] and concurred with Yale economist Robert Shiller's warning that home prices appear overvalued and that the correction could last years, with trillions of dollars of home value being lost.[23] Greenspan warned of "large double digit declines" in home values "larger than most people expect."[21] Problems for home owners with good credit surfaced in mid-2007, causing the U.S.'s largest mortgage lender, Countrywide Financial, to warn that a recovery in the housing sector was not expected to occur at least until 2009 because home prices were falling "almost like never before, with the exception of the Great Depression."[24] The impact of booming home valuations on the U.S. economy since the 2001–2002 recession was an important factor in the recovery, because a large component of consumer spending was fueled by the related refinancing boom, which allowed people to both reduce their monthly mortgage payments with lower interest rates and withdraw equity from their homes as their value increased.[3] Any collapse of the U.S. Housing Bubble has a direct impact not only on home valuations, but the nation's mortgage markets, home builders, real estate, home supply retail outlets, Wall Street hedge funds held by large institutional investors, and foreign banks, increasing the risk of a nationwide recession.[24][3][25][26] Concerns about the impact of the collapsing housing and credit markets on the larger U.S. economy caused President George W. Bush and the Chairman of the Federal Reserve Ben Bernanke to announce a limited bailout of the U.S. housing market for homeowners who were unable to pay their mortgage debts.[27]
In 2008 alone, the United States government allocated over $900 billion to special loans and rescues related to the US housing bubble, with over half going to the quasi-government agencies of Fannie Mae, Freddie Mac, and the Federal Housing Administration.[28]
Timeline
編集Identifying the housing bubble
編集Although many people claim that an economic bubble is difficult to identify except in hindsight, numerous economic cultural factors led several economists (especially in late 2004 and early 2005) to argue that a housing bubble existed in the U.S.[12][7][29][30][31][32][33][34] However, claims that there was no warning of the crisis were repudiated in an August 2008 article in the The New York Times, which reported that Richard F. Syron, the CEO of Freddie Mac, received a memo from David Andrukonis, the company's former chief risk officer in 2003, warning him that Freddie Mac was financing risk-laden loans that threatened Freddie Mac's financial stability. In his memo, Mr. Andrukonis wrote that these loans "would likely pose an enormous financial and reputational risk to the company and the country."[35] The article revealed that more than two-dozen high-ranking executives said that Mr. Syron had simply decided to ignore the warnings. Other cautions came as early as 2001, when the late Federal Reserve governor Edward Gramlich warned of the risks posed by sub-prime mortgages.[36] Reuters reported in October 2007 that a Merrill Lynch analyst too had warned in 2006 that companies could suffer from their subprime investments.
The Economist magazine stated, "The worldwide rise in house prices is the biggest bubble in history,"[37] so any explanation needs to consider its global causes as well as those specific to the United States. The then Federal Reserve Board Chairman Alan Greenspan said in mid-2005 that "at a minimum, there's a little 'froth' (in the U.S. housing market) ... it's hard not to see that there are a lot of local bubbles"; Greenspan admitted in 2007 that froth "was a euphemism for a bubble."[21] In early 2006, President Bush said of the U.S. housing boom: "If houses get too expensive, people will stop buying them... Economies should cycle."[38]
On the basis of 2006 market data that were indicating a marked decline, including lower sales, rising inventories, falling median prices and increased foreclosure rates,[16] some economists have concluded that the correction in the U.S. housing market began in 2006.[25][39] A May 2006 Fortune magazine report on the US housing bubble states: "The great housing bubble has finally started to deflate ... In many once-sizzling markets around the country, accounts of dropping list prices have replaced tales of waiting lists for unbuilt condos and bidding wars over humdrum three-bedroom colonials."[14] The chief economist of Freddie Mac and the director of Harvard University's Joint Center for Housing Studies (JCHS) denied the existence of a national housing bubble and expressed doubt that any significant decline in home prices was possible, citing consistently rising prices since the Great Depression, an anticipated increased demand from the Baby Boom generation, and healthy levels of employment.[40][41][42] However, some have suggested that the funding received by JCHS from the real estate industry may have affected their judgment.[43] David Lereah, former chief economist of the National Association of Realtors (NAR), distributed "Anti-Bubble Reports" in August 2005 to "respond to the irresponsible bubble accusations made by your local media and local academics."[44] Among other statements, the reports stated that people "should [not] be concerned that home prices are rising faster than family income", that "there is virtually no risk of a national housing price bubble based on the fundamental demand for housing and predictable economic factors", and that "a general slowing in the rate of price growth can be expected, but in many areas inventory shortages will persist and home prices are likely to continue to rise above historic norms."[45] Following reports of rapid sales declines and price depreciation in August 2006,[46][47] Lereah admitted that he expected "home prices to come down 5% nationally, more in some markets, less in others. And a few cities in Florida and California, where home prices soared to nose-bleed heights, could have 'hard landings'."[18]
National home sales and prices both fell dramatically in March 2007 — the steepest plunge since the 1989 Savings and Loan crisis. According to NAR data, sales were down 13% to 482,000 from the peak of 554,000 in March 2006, and the national median price fell nearly 6% to $217,000 from a peak of $230,200 in July 2006.[19]
John A. Kilpatrick, of Greenfield Advisors, was cited by Bloomberg News on June 14, 2007, on the linkage between increased foreclosures and localized housing price declines: "Living in an area with multiple foreclosures can result in a 10 per cent to 20 per cent decrease in property values." He went on to say, "In some cases that can wipe out the equity of homeowners or leave them owing more on their mortgage than the house is worth. The innocent houses that just happen to be sitting next to those properties are going to take a hit."[48]
The US Senate Banking Committee held hearings on the housing bubble and related loan practices in 2006, titled "The Housing Bubble and its Implications for the Economy" and "Calculated Risk: Assessing Non-Traditional Mortgage Products".[49] Following the collapse of the subprime mortgage industry in March 2007, Senator Chris Dodd, Chairman of the Banking Committee held hearings and asked executives from the top five subprime mortgage companies to testify and explain their lending practices. Dodd said that "predatory lending practices" had endangered home ownership for millions of people.[6] In addition, Democratic senators such as Senator Charles Schumer of New York were already proposing a federal government bailout of sub-prime borrowers in order to save homeowners from losing their residences.[6]
Causes
編集National bubble or local bubbles?
編集Home price appreciation has been non-uniform to such an extent that some economists, including former Fed Chairman Alan Greenspan, have argued that United States was not experiencing a nationwide housing bubble per se, but a number of local bubbles.[50] However, in 2007 Greenspan admitted that there was in fact a bubble in the US housing market, and that "all the froth bubbles add up to an aggregate bubble."[21] Despite greatly relaxed lending standards and low interest rates, many regions of the country saw very little growth during the "bubble period". Out of 20 largest metropolitan areas tracked by the S&P/Case-Shiller house price index, six (Dallas, Cleveland, Detroit, Denver, Atlanta, and Charlotte) saw less than 10% price growth in inflation-adjusted terms in 2001–2006.[51] During the same period, seven metropolitan areas (Tampa, Miami, San Diego, Los Angeles, Las Vegas, Phoenix, and Washington DC) appreciated by more than 80%.
However, housing bubbles did not manifest themselves in each of these areas at the same time. San Diego and Los Angeles had maintained consistently high appreciation rates since late 1990s, whereas the Las Vegas and Phoenix bubbles did not develop until 2003 and 2004 respectively.
Somewhat paradoxically, as the housing bubble deflates[52] some metropolitan areas (such as Denver and Atlanta) have been experiencing high foreclosure rates, even though they did not see much house appreciation in the first place and therefore did not appear to be contributing to the national bubble. This was also true of some cities in the Rust Belt such as Detroit[53] and Cleveland,[54] where weak local economies had produced little house price appreciation early in the decade but still saw declining values and increased foreclosures in 2007. As of January 2009 California, Michigan, Ohio and Florida were the states with the highest foreclosure rates.
By July 2008 year-to-date prices had declined in 24 of 25 U.S. metropolitan areas, with California and the southwest experiencing the greatest price falls. According to the reports, only Milwaukee had seen an increase in house prices after July 2007. [55]
Side effects
編集The unprecedented increase in house prices between 1997 and 2005 produced numerous wide-ranging effects in the economy of the United States.
- One of the most direct effects was on the construction of new houses. In 2005, 1,283,000 new single-family houses were sold, compared with an average of 609,000 per year during 1990–1995.[56] Largest home builders, such as D. R. Horton, Pulte, and Lennar, saw their largest share prices and revenues in 2004–2005. D. R. Horton's stock went from $3 in early 1997 to all-time high of $42.82 on July 20, 2005. Pulte Corp's revenues grew from $2.33 billion in 1996 to $14.69 billion in 2005.[57][58][59]
- Mortgage equity withdrawals - primarily home equity loans and cash-out refinancings - grew considerably since early 1990s. According to US Federal Reserve estimates, in 2005 homeowners extracted $750 billion of equity from their homes (up from $106 billion in 1996), spending two thirds of it on personal consumption, home improvements, and credit card debt.[60]
- It is widely believed that the increased degree of economic activity produced by the expanding housing bubble in 2001–2003 was partly responsible for averting a full-scale recession in the U.S. economy following the dot-com burst.[61]
- Rapidly growing house prices and increasing price gradients forced many residents to flee the expensive centers of many metropolitan areas, resulting in the explosive growth of exurbs in some regions. The population of Riverside County, California almost doubled from 1,170,413 in 1990 to 2,026,803 in 2006, due to its relative proximity to San Diego and Los Angeles. On the East Coast, Loudoun County, Virginia, near Washington, DC, saw its population triple between 1990 and 2006.en:Template:Fact
The real estate market correction of 2006–2007 reversed these trends.en:Template:Fact As of August 2007, D.R. Horton's and Pulte Corp's shares had fallen to 1/3 of their respective peak levels as new residential home sales fell. Some of the cities and regions that had experienced the fastest growth during 2000–2005 began to experience high foreclosure rates.[52] It was suggested that the weakness of the housing industry and the loss of the consumption that had been driven by the withdrawal of mortgage equity could lead to a recession, but as of mid-2007 the existence of this recession had not yet been ascertained.[62] In March 2008, Thomson Financial reported that the "Chicago Federal Reserve Bank's National Activity Index for February sent a signal that a recession [had] probably begun..."[63]
The share prices of Fannie Mae and Freddie Mac plummeted in 2008 as investors worried that they lacked sufficient capital to cover the losses on their $5 trillion portfolio of loans and loan guarantees.
Housing market correction
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Basing their statements on historic U.S. housing valuation trends,[7][65] many economists and business writers predicted market corrections ranging from a few percentage points to 50% or more from peak values in some markets,[66][67][68][13][69] and although this cooling had yet not affected all areas of the U.S., some warned that it still could, and that the correction would be "nasty" and "severe".[70][71] Chief economist Mark Zandi of the economic research firm Moody's Economy.com predicted a "crash" of double-digit depreciation in some U.S. cities by 2007–2009.[72][73][1] In a paper he presented to a Federal Reserve Board economic symposium in August 2007, Yale University economist Robert Shiller warned, "The examples we have of past cycles indicate that major declines in real home prices—even 50 per cent declines in some places—are entirely possible going forward from today or from the not-too-distant future."[74]
The bursting of the bubble
編集The booming housing market appears to have halted abruptly in many parts of the U.S. in the late summer of 2005, and by the summer of 2006 several markets were facing the issues of ballooning inventories, falling prices and sharply reduced sales volumes. In August 2006, Barron's magazine warned that "a housing crisis approaches", and noted that the median price of new homes had dropped almost 3% since January 2006; that new-home inventories hit a record in April 2006, and remained near all-time highs; that existing-home inventories were 39% higher than they had been just one year before; and that sales were down more than 10%. It also predicted that "the national median price of housing will probably fall by close to 30% in the next three years ... simple reversion to the mean."[13] Fortune magazine labelled many previously strong housing markets as "Dead Zones;"[14] it classified other areas as "Danger Zones" and "Safe Havens". Fortune also dispelled "four myths about the future of home prices."[46] In Boston, year-over-year prices were dropping,[75] sales were falling, inventory was increasing, foreclosures were up,[15][16] and the correction in Massachusetts was termed a "hard landing".[76] The previously booming[9] housing markets in Washington, D.C., San Diego, Phoenix and other cities were also stalled.[77][78] A search through the Arizona Regional Multiple Listing Service (ARMLS) shows that by the summer of 2006 the for-sale housing inventory in Phoenix had grown to over 50,000 homes, of which nearly half were vacant (see graphic).[17] Several home builders revised their forecasts sharply downward during summer 2006/ For instance, D.R. Horton cut its yearly earnings forecast by one-third in July 2006,[79] the value of luxury home builder Toll Brothers' stock fell 50% between August 2005 and August 2006,[80] and the Dow Jones U.S. Home Construction Index was down over 40% as of mid-August 2006.[81] CEO Robert Toll of Toll Brothers explained: "Builders that built speculative homes are trying to move them by offering large incentives and discounts; and some anxious buyers are canceling contracts for homes already being built."[82] Homebuilder Kara Homes, known for constructing "McMansions", announced on September 13, 2006 the "two most profitable quarters in the history of our company", but filed for bankruptcy protection less than one month later on 6 October.[83] Six months later on April 10, 2007, Kara Homes sold its unfinished developments, causing prospective buyers from the previous year, some of whom had put down more than $100,000, to lose their deposits.[84]
As the housing market began to soften between the winter of 2005 and the summer of 2006,[85][86] NAR chief economist David Lereah predicted a "soft landing" for the market.[87] However, because of the unprecedented rises in inventory and a sharply slowing market throughout 2006, Leslie Appleton-Young, the chief economist of the California Association of Realtors, said that she was not comfortable with the mild term "soft landing" to describe what was actually happening in California's real estate market.[88] The Financial Times warned of the impact on the U.S. economy of the "hard edge" in the "soft landing" scenario, saying that "A slowdown in these red-hot markets is inevitable. It may be gentle, but it is impossible to rule out a collapse of sentiment and of prices... If housing wealth stops rising... the effect on the world's economy could be depressing indeed."[89] "It would be difficult to characterize the position of home builders as other than in a hard landing", said Robert Toll, CEO of Toll Brothers.[90] Angelo Mozilo, CEO of Countrywide Financial, said "I've never seen a soft landing in 53 years, so we have a ways to go before this levels out. I have to prepare the company for the worst that can happen."[91] Following these reports, Lereah admitted that he expected "home prices to come down 5% nationally", and said that some cities in Florida and California could have "hard landings."[18] National home sales and prices both saw further dramatic falls in March 2007, according to NAR data, with sales down 13% to 482,000 from the peak of 554,000 in March 2006, and with the national median price falling nearly 6% to $217,000 from the peak of $230,200 in July 2006 . The plunge in existing-home sales was the steepest since 1989.[19] The new home market was also suffering. The biggest year-over-year drop in median home prices since 1970 was reported in April 2007. Median prices for new homes fell 10.9%, according to the Commerce Department.[92]
In August 2006, slumping sales and prices caused economist Nouriel Roubini to warn that the housing sector was in "free fall" and would derail the rest of the economy, causing a recession in 2007.[25] Joseph Stiglitz, the 2001 winner of the Nobel Prize in economics, agreed, saying that the U.S. could enter a recession as house prices declined.[93] The duration of the economic slowdown or recession will depend in large part on the resiliency of U.S. consumer spending, which now makes up approximately 70% of the U.S. $13.7 trillion economy. The evaporation of the wealth effect amid the current housing downturn could negatively affect the consumer confidence and produce further headwinds for the economies of both the U.S. and the rest of the world. The World Bank lowered its figures for the global economic growth rate due to the housing slowdown in the United States, but did not believe that the U.S. housing malaise would further spread to the rest of the world. The Fed chairman Benjamin Bernanke said in October 2006 that there was currently a "substantial correction" going on in the housing market, and that the decline of residential housing construction was one of the "major drags that is causing the economy to slow"; he predicted that the correcting market would decrease U.S. economic growth by about one per cent in the second half of 2006, and would continue to be a drag on expansion into 2007.[94] The White House Council of Economic Advisers lowered its forecast for U.S. economic growth in 2008 from 3.1 per cent to 2.7 per cent and forecast higher unemployment, reflecting the turmoil in the credit and residential real-estate markets. The Bush Administration economic advisers also revised their unemployment outlook and predicted the unemployment rate could rise slightly above 5 per cent, up from the prevailing unemployment rate of 4.6 per cent.[95]
Others speculated on the negative impact on the declining housing market of the retirement of the Baby Boom generation and the relative cost of renting.[96][97] In many parts of the United States, it is significantly cheaper to rent a property than to purchase the same property; the national median mortgage payment is $1,687 per month, nearly twice the median rent of $868 per month.[98] However, the appreciation of home prices in many parts of the country has lured many renters into becoming homeowners. But the appreciation of home values far exceeded the income growth of many of these homebuyers, pushing them to leverage themselves beyond their means. They borrowed even more money in order to purchase homes whose cost was much greater than their ability to meet their mortgage obligations. Many of these homebuyers took out adjustable-rate mortgages during the period of low interest rates in order to purchase the home of their dreams. Initially, they were able to meet their mortgage obligations thanks to the low "teaser" rates being charged in the early years of the mortgage. However, as the Federal Reserve Bank applied its monetary contraction policy in 2005, many homeowners were stunned when their adjustable-rate mortgages began to reset to much higher rates in mid-2007 and their monthly payments jumped far above their ability to meet the monthly mortgage payments. Some homeowners began defaulting on their mortgages in mid-2007, and the cracks in the U.S. housing foundation became apparent.
Subprime mortgage industry collapse
編集In March 2007, the United States' sub-prime mortgage industry collapsed due to higher-than-expected home foreclosure rates, with more than 25 sub-prime lenders declaring bankruptcy, announcing significant losses, or putting themselves up for sale.[99] The stock of the country's largest sub-prime lender, New Century Financial, plunged 84% amid Justice Department investigations, before ultimately filing for Chapter 11 bankruptcy on April 2, 2007 with liabilities exceeding $100 million.[100] The manager of the world's largest bond fund, PIMCO, warned in June 2007 that the sub-prime mortgage crisis was not an isolated event and would eventually take a toll on the economy and ultimately have an impact in the form of impaired home prices.[101] Bill Gross, a "most reputable financial guru",[26] sarcastically and ominously criticized the credit ratings of the mortgage-based CDOs now facing collapse:
AAA? You were wooed, Mr. Moody's and Mr. Poor's, by the makeup, those six-inch hooker heels, and a "tramp stamp." Many of these good-looking girls are not high-class assets worth 100 cents on the dollar... [T]he point is that there are hundreds of billions of dollars of this toxic waste... This problem [ultimately] resides in America's heartland, with millions and millions of overpriced homes".[26]
Business Week has featured predictions by financial analysts that the sub-prime mortgage market meltdown would result in earnings reductions for large Wall Street investment banks trading in mortgage-backed securities, especially Bear Stearns, Lehman Brothers, Goldman Sachs, Merrill Lynch, and Morgan Stanley.[99] The solvency of two troubled hedge funds managed by Bear Stearns was imperiled in June 2007 after Merrill Lynch sold off assets seized from the funds and three other banks closed out their positions with them. The Bear Stearns funds once had over $20 billion of assets, but lost billions of dollars on securities backed by sub-prime mortgages.[102] H&R Block reported that it had made a quarterly loss of $677 million on discontinued operations, which included the sub-prime lender Option One, as well as writedowns, loss provisions for mortgage loans and the lower prices achievable for mortgages in the secondary market. The unit's net asset value had fallen 21% to $1.1 billion as of April 30, 2007.[103] The head of the mortgage industry consulting firm Wakefield Co. warned, "This is going to be a meltdown of unparalleled proportions. Billions will be lost." Bear Stearns pledged up to U.S. $3.2 billion in loans on June 22, 2007 to bail out one of its hedge funds that was collapsing because of bad bets on sub-prime mortgages.[104] Peter Schiff, president of Euro Pacific Capital, argued that if the bonds in the Bear Stearns funds were auctioned on the open market, much weaker values would be plainly revealed. Schiff added, "This would force other hedge funds to similarly mark down the value of their holdings. Is it any wonder that Wall street is pulling out the stops to avoid such a catastrophe?... Their true weakness will finally reveal the abyss into which the housing market is about to plummet."[105] The New York Times report connects the hedge fund crisis with lax lending standards: "The crisis this week from the near collapse of two hedge funds managed by Bear Stearns stems directly from the slumping housing market and the fallout from loose lending practices that showered money on people with weak, or subprime, credit, leaving many of them struggling to stay in their homes."[104]
On August 9, 2007, BNP Paribas announced that it could not fairly value the underlying assets in three funds because of its exposure to U.S. subprime mortgage lending markets.[106] Faced with potentially massive (though unquantifiable) exposure, the European Central Bank (ECB) immediately stepped in to ease market worries by opening lines of € 96.8 billion (U.S. $130 billion) of low-interest credit.[107] One day after the financial panic about a credit crunch had swept through Europe, the U.S. Federal Reserve Bank conducted an "open market operation" to inject U.S. $38 billion in temporary reserves into the system to help overcome the ill effects of a spreading credit crunch, on top of a similar move the previous day.[108] In order to further ease the credit crunch in the U.S. credit market, at 8:15 a.m. on August 17, 2007 the chairman of the Federal Reserve Bank Ben Bernanke decided to lower the discount window rate, which is the lending rate between banks and the Federal Reserve Bank, by 50 basis points to 5.75% from 6.25%. The Federal Reserve Bank stated that the recent turmoil in the U.S. financial markets had raised the risk of an economic downturn.
In the wake of the mortgage industry meltdown, Senator Chris Dodd, Chairman of the Banking Committee held hearings in March 2007 in which he asked executives from the top five sub-prime mortgage companies to testify and explain their lending practices. Dodd said that "predatory lending practices" were endangering home ownership for millions of people.[6] In addition, Democratic senators such as Senator Charles Schumer of New York were already proposing a federal government bailout of sub-prime borrowers like the bailout made in the Savings and Loan crisis, in order to save homeowners from losing their residences. Opponents of such a proposal asserted that a government bailout of sub-prime borrowers is not in the best interests of the U.S. economy because it would simply set a bad precedent, create a moral hazard, and worsen the speculation problem in the housing market.
Lou Ranieri of Salomon Brothers, creator of the mortgage-backed securities market in the 1970s, warned of the future impact of mortgage defaults: "This is the leading edge of the storm. … If you think this is bad, imagine what it's going to be like in the middle of the crisis." In his opinion, more than $100 billion of home loans are likely to default when the problems seen in the sub-prime industry also emerge in the prime mortgage markets.[109] Former Federal Reserve Chairman Alan Greenspan had praised the rise of the sub-prime mortgage industry and the tools which it uses to assess credit-worthiness in an April 2005 speech.[110] Because of these remarks, as well as his encouragement of the use of adjustable-rate mortgages, Greenspan has been criticized for his role in the rise of the housing bubble and the subsequent problems in the mortgage industry that triggered the economic crisis of 2008.[111][112][113] Concerning the sub-prime mortgage mess, Greenspan later admitted that "I really didn't get it until very late in 2005 and 2006."[22]
On September 13, 2007, the British bank Northern Rock applied to the Bank of England for emergency funds because of liquidity problems related to the subprime crisis.[114] This precipitated a bank run at Northern Rock branches across the UK by concerned customers who took out "an estimated £2bn withdrawn in just three days".[115]
Alt-A mortgage problems
編集Subprime and Alt-A loans (including "stated income loans", which are loans made to home buyers without verification of their incomes; as homebuyers tend to overstate their incomes in order to obtain their desired loan amounts in order to purchase their dream homes, the term "liar's loans" is often used to describe them) account for about 21 per cent of loans outstanding and 39 per cent of the mortgages issued in 2006.[116] In April 2007, financial problems similar to the sub-prime mortgages began to emerge with respect to Alt-A loans issued to homeowners who had been considered less risky.[116] American Home Mortgage said that it would earn less and pay out a smaller dividend to its shareholders because it was being asked to buy back and write down the value of Alt-A loans made to borrowers with decent credit, causing company stocks to tumble 15.2 per cent. American Home Mortgage filed for bankruptcy in August 2007.[117] The delinquency rate for Alt-A mortgages rose in 2007.[116] In June 2007, Standard & Poor's warned that U.S. homeowners with good credit were increasingly falling behind with their mortgage payments, an indication that lenders had been offering higher-risk loans outside the subprime market; they said that an increase in late payments and defaults on Alt-A mortgages made in 2006 were "disconcerting", and that delinquent borrowers appeared to be "finding it increasingly difficult to refinance" or catch up on their payments.[118] Late payments of at least 90 days and defaults on 2006 Alt-A mortgages had increased to 4.21 per cent, up from 1.59 per cent for 2005 mortgages and 0.81 per cent for 2004, indicating that "subprime carnage is now spreading to near prime mortgages."[26]
Foreclosure rates increase
編集The 30-year mortgage rates increased by more than a half a percentage point to 6.74 per cent during May–June 2007, affecting borrowers with the best credit ratings just as a crackdown in sub-prime lending standards was limiting the pool of qualified buyers. The national median home price was poised for its first annual decline since the Great Depression, and the NAR reported that supply of unsold homes stood at a record 4.2 million. Goldman Sachs and Bear Stearns, respectively the world's largest securities firm and largest underwriter of mortgage-backed securities in 2006, said in June 2007 that rising foreclosures had reduced their earnings and that the loss of billions from bad investments in the subprime market was imperiling the solvency of several hedge funds. In addition, a number of big commercial banks such as Citibank, and investment banks such as Merrill Lynch, announced significant write-offs against 3rd- and 4th-quarter 2007 earnings. As a result, Citigroup's Board of Directors ousted its CEO Charles Prince and replaced him with Vikram Pandit, a former Morgan Stanley executive and hedge-fund manager, and Merrill Lynch's Board of Directors replaced its CEO Stanley O'Neal with John Thain, an alumnus of Goldman Sachs and former CEO of NYSE Euronext. Mark Kiesel, executive vice president of a California-based Pacific Investment Management Co. said,
It's a blood bath. ... We're talking about a two- to three-year downturn that will take a whole host of characters with it, from job creation to consumer confidence. Eventually it will take the stock market and corporate profit.[119]
Government bailouts
編集en:Template:See also en:Template:See also Many in the U.S. Congress and Administration proposed government bailouts of the mortgage and credit crisis, similar to the Savings and Loan crisis of the 1980s. Critics of such proposals quickly rebuffed the idea of government bailouts and calling such bailouts irresponsible. They further argued that bailouts would only promote imprudence in the future.
Following the collapse of the subprime mortgage industry in March 2007, Democratic Senator Charles Schumer of New York proposed a federal government bailout of sub-prime borrowers in order to save homeowners from losing their residences.[6]
On August 31, 2007, concerns about the impact of the collapsing housing and credit markets on the larger U.S. economy impelled President Bush and Fed Chairman Ben Bernanke to announce a limited bailout of the U.S. housing market for homeowners who were unable to pay their mortgage debts.[27] Mr. Bush said that his administration wished to alleviate the subprime mortgage crisis by "helping people who have good credit but who have not made all of their payments on time because of rising mortgage payments" with FHA-Secure.[120] However, homeowners with subprime loans have poor credit by definition; therefore, the immediate intent and scope of Bush's announced plan was not entirely clear.[120] President Bush's largest campaign contributor was Roland E. Arnall, the former CEO of the largest sub-prime lender in the U.S., Ameriquest, which has since gone out of business;[121] Bush nominated Arnall as the U.S. Ambassador to the Netherlands.[122] On December 6, 2007, Bush announced a plan for a voluntary temporary freezing of the introductory mortgage rates (the so-called "teaser rates") for a limited number of mortgage debtors holding ARMs for five years, declaring "I have a message for every homeowner worried about rising mortgage payments: The best you can do for your family is to call 1-800-995-HOPE".[123] Government officials denied that this proposal was actually a bailout, and acknowledged that it was not a panacea to cure the ailments of the housing sector. Treasury Secretary Henry Paulson admitted that there were no easy solutions to the housing problem, and that the plan comprised a temporary relief to homeowners facing mortgage-rate resets rather than a long-term solution for stabilizing the housing market. Nevertheless, some experts criticized this plan as being "a Band-Aid when the patient needs major surgery",[124] a "teaser-freezer",[125] and a "bail-out"[126] in which "the liars have won."[127]
Whether the bursting of the U.S. housing bubble would become a partisan issue in the 2008 presidential election was uncertain. During a live interview on CNBC with Maria Bartiromo, New York Senator and 2008 Democratic Presidential Candidate Hillary Rodham Clinton suggested that the government should set up a $5 billion fund to assist homeowners on the brink of losing their homes.[128] Moreover, she argued that nationwide foreclosures would devastate communities and encourage crime in their neighborhoods. However, skeptics of such schemes questioned whether the $5 billion fund would be sufficient to help the 1.4 million homeowners anticipated to lose their homes in 2008 and the first half of 2009 once their "teaser" mortgage rates were reset to variable market rates of up to 11-13 per cent. On Jan 11, 2008, Democratic presidential contender Hillary Clinton proposed a $70 billion emergency spending package to help homeowners affected by the U.S. housing crisis.[129] A potential conflict of interest was possible because Senator Hillary Clinton had received major contributions from the mortgage banking industry[130] and her strategist Mark Penn had been linked to Countrywide Mortgage, one of the major sub-prime lenders.[131]
Some economists assert that a bail out creates a moral hazard that encourages future risky lending and borrowing by signaling that in extreme circumstances, the government will bail out bad lenders and borrowers[132] They further argue that government bailouts will only encourage further speculative activities in non-housing markets. Such bailouts, in their view, will prolong the inevitable consequences of the housing crisis and exacerbate other financial crises in the future. They also assert that a taxpayer-funded bailout will merely assist real-estate speculators, irresponsible homebuyers and mortgage fraudsters.
A September 2007 national poll by NBC News and the Wall Street Journal found widespread opposition to a bailout of sub-prime borrowers facing foreclosure, with 59% of respondents opposing a federal role in the avoidance of foreclosures.[133] Most respondents argued that government interference in private transactions between homebuyers and lenders would set a bad precedent. Some of them wondered whether the government could compel credit-card companies to freeze the introductory rates of zero per cent offered to credit-card debtors when debtors got into trouble paying their credit card bills. Economic experts opined that only market-based solutions would eventually solve the current housing problem. Any non-market-based solutions would only set an artificial floor for housing prices across the nation. According to former Fed Chairman Alan Greenspan, the credit crunch in the financial market would not end until the inventory of homes on the market was liquidated and the declines in residential real-estate prices had played themselves out.[134] In other words, the supply of homes and the demand for them must first reach equilibrium before any recovery in U.S. housing market was possible, and after enjoying the housing boom between 2002 and 2007, homeowners must be willing to sit through the subsequent housing bust patiently. As Greenspan warned before he completed his tenure at the Federal Reserve Bank:
"Any onset of increased investor caution elevates risk premiums and, as a consequence, lowers asset values and promotes the liquidation of the debt that supported higher asset prices. This is the reason that history has not dealt kindly with the aftermath of protracted periods of low risk premiums."[135]
In other words, risk-averse investors would demand higher yields on their investments, thus driving down asset prices – especially highly leveraged assets such as real estate. Therefore homeowners must deleverage themselves by putting more equity into their homes in order to keep them, and future homebuyers may have to make significant down-payments in order to obtain mortgage loans. The protracted period of Americans buying homes with zero down-payments and getting mortgage loans with little or no documentation has finally come to an end.
関連項目
編集- Subprime mortgage crisis
- Subprime lending
- Mortgage loan
- Real estate bubble
- Economic crisis of 2008
- List of entities involved in 2007 finance crises
- The world housing bubble
- Economic bubble
- Real estate pricing
- Real estate appraisal
- Real estate economics
- Real estate trends
- Creative Real Estate Investing
- Deed in lieu of foreclosure
- Foreclosure consultant
Further reading
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- June Fletcher (2005), House Poor: Pumped Up Prices, Rising Rates, and Mortgages on Steroid - How to Survive the Coming Housing Crisis, New York: Collins. ISBN 0-06-087322-1.
- Fred E. Foldvary (1997), "The Business Cycle: A Georgist-Austrian Synthesis," American Journal of Economics and Sociology 56(4):521–41, October.
- Fred E. Foldvary (2007), The Depression of 2008, Berkeley: The Gutenberg Press. ISBN 0-9603872-0-X.
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- N. Gregory Mankiw and David N. Weil (1989). "The baby boom, the baby bust, and the housing market", Regional Science and Urban Economics, Vol.19, No.2, May 1989, pp.235-258.
- John R. Talbott (2006). Sell Now!: The End of the Housing Bubble, New York: St. Martin's Griffin. ISBN 0-312-35788-5.
- John R. Talbott (2003). The Coming Crash in the Housing Market, New York: McGraw-Hill. ISBN 0-07-142220-X.
- Elizabeth Warren and Amelia Warren Tyagi (2003). The Two-Income Trap: Why Middle Class Mothers and Fathers are Going Broke, New York: Basic Books. ISBN 0-465-09082-6.
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外部リンク
編集- Buy vs. Rent Calculator - from The New York Times.
- Center for Economic and Policy Research - CEPR regularly releases reports on the U.S. Housing Bubble.
- Reality Check with Diana Orlick - from CNBC.
- Office of Federal Housing Enterprise Oversight - Quarterly Government Appreciation Statistics (Statewide)]
- TrendLines Research - Long term price correction projection
- The bursting of the US house price bubble (PDF, 401 KiB) Article by Stéphane Sorbe, French Treasury, July 2008
- Housing bubble weblogs, cited in BusinessWeek, Chicago Tribune, CNN/Money, Newsweek, Salon, San Francisco Chronicle, Times (Trenton, N.J.), Wall Street Journal, Washington Post, Motley Fool:
- Housing, 2009, "Home Retention Plans" Housing Crisis: Overview of Plans to Help Homeowners.
- The Housing Bubble Blog - blog.[69][136][137] - Ben Jones's news-oriented blog.
- Housing Panic - blog,[126][69][43] broke the iamfacingforeclosure.com "liar loan" story.[138]
- Bubble Meter - blog.[139][69]
- Calculated Risk - blog.[69]
- Housing News Live - blog.[69]
- patrick.net - blog.[69][137][140]
- Professor Piggington - blog.[69][137]
- New Jersey Housing Bubble - blog.[69]
- House Bubble - blog.[69][141]
- David Lereah Watch - blog,[47][136][142][137][140] monitors the statements of National Association of Realtors.
- Matrix - blog.[143]
- Housing Bubble Casualty - blog.[144]
- Paper-Money - blog,[145] also streams video of the Senate Banking Committee's housing bubble hearings,[49] publishes Bubble News Network and Bubble Times.
References and notes
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en:Category:United States housing bubble en:Category:Economic history of the United States en:Category:Financial economics en:Category:2000s economic history
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- ^ a b en:Template:Cite news Plot of inflation-adjusted home price appreciation in several U.S. cities, 1990–2005:
Plot of inflation-adjusted home price appreciation in several U.S. cities, 1990–2005. - ^ a b en:Template:Cite news
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- ^ a b A prediction of a correction in the housing market, possibly after the "fall" of 2005, is implied by The Economist magazine's cover story for the article "After the fall", which illustrates a brick falling, with the label "House Prices": Image:Economist-06-15-2005.jpg. en:Template:Cite news
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This article classified several U.S. real-estate regions as "Dead Zones", "Danger Zones", and "Safe Havens."
Fortune magazine Housing Bubble "Dead Zones" "Dead Zones" "Danger Zones" "Safe Havens" Boston Chicago Cleveland Las Vegas Los Angeles Columbus Miami New York Dallas Washington D.C. / Northern Virginia San Francisco / Oakland Houston Phoenix Seattle Kansas City Sacramento Omaha San Diego Pittsburgh - ^ a b en:Template:Cite news
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Inventory of houses for sale in Phoenix, AZ from July 2005 through March 2006. As of March 10, 2006, well over 14,000 (nearly half) of these for-sale homes were vacant. (Source: Arizona Regional Multiple Listing Service.) - ^ a b c en:Template:Cite news
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- ^ Reuters. (2008). FACTBOX - U.S. government bailout tally tops 504 billion pounds.
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- ^ At Freddie Mac, Chief Discarded Warning Signs, Charles Duhigg, The New York Times, August 5, 2008
- ^ Did Greenspan add to subprime woes? Gramlich says ex-colleague blocked crackdown on predatory lenders despite growing concerns, Wall Street Journal, Greg Ip, JUNE 9, 2007
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- ^ a b en:Template:Cite news Streaming video is available at the "Paper-Money" blog for both the hearings of "The Housing Bubble and its Implications for the Economy" and "Calculated Risk: Assessing Non-Traditional Mortgage Products."
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Condominium Price Appreciation (percentages) in the south and west United States, 2002–2006. (Source: NAR.) - ^ en:Template:Cite news
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- ^ On October 15, 2008, Anthony Faiola, Ellen Nakashima and Jill Drew wrote a lengthy article in the Washington Post titled, "What Went Wrong." See http://www.washingtonpost.com/wp-dyn/content/article/2008/10/14/AR2008101403343_5.html?hpid=topnews&sid=ST2008101403344&s_pos=. In their investigation, the authors claim that Greenspan vehemently opposed any regulation of financial instruments known as derivatives. They further claim that Greenspan actively sought to undermine the office of the Commodity Futures Trading Commission, specifically under the leadership of Brooksley E. Born, when the Commission sought to initiate the regulation of derivatives. Ultimately, it was the collapse of a specific kind of derivative, the Mortgage Backed Security, that triggered the economic crisis of 2008.
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