Source: The Cryptonomist —
The most useful feature of the housing market is that it is an excellent thermometer for the country’s economy. It anticipates what will be, so when the market concerned is the American market, which is 25% of the planet’s economy, contagion to Europe is only a matter of time.
US: another housing bubble similar to 2008?
In 2008, the US real estate market had already experienced a very important bubble in terms of volume, compared to that, today there is a totally different picture that makes the two events not at all comparable.
The first bubble was also called the subprime mortgage bubble, with this name being used to identify those mortgages that did not match a first-rate creditworthiness.
At the time, a large majority of Americans took on debt for the purchase of one or more homes given the ease of access to credit, up until loans became increasingly difficult to obtain and the ability to repay less performing and so, in cascade as the mortgages “blew up,” the economy plunged into a state of recession.
The damage generated by that chain of events was made up in numbers only two years ago, in 2020, with remarkable property value growth, 13% year-on-year, far higher than the 20-year average of 2% and even the 10-year average of around 5%.
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