467,000 more jobs lost in June.

[Avinash_Tyagi]

HappySqurriel said:

Avinash_Tyagi said:
You're missing the point though, it wasn't until a decade later, that most of these foolish loans started getting handed out, between 1996 and 2004, only 9% of loans given were subprime, it wasn't until 2004 to 2006 that the number jumped to 21%, if it was just the government trying to mandate expanded housing, it wouldn't have taken 12 years to happen. No the reason it happened was becuase banks got greedy, they saw that the market was charging upwards and thought that they could make big bank by betting on these high risk borrowers.

The government wasn't the cause of this, it was the greedy stupidity of the banks and thinking that the market would keep going up.

I don't think you understand how the changes to lending actually impacted the market on the whole. The changes to lending practices created an imbalance and started the largest bubble the housing market has ever seen. It wasn't until 2004 through 2006 when housing prices had risen to a level where more "Typical" home buyers were forced into sub-prime mortgages in order to qualify to buy any home.

 

Uh, no, I don't think you get it, there are plenty of markets where home prices didn't rise as fast, in fact a ot of the rise in housing values was centered in certain markets, showing that there was no requirement to push people into subprime to purchse homes, in addition you are still missing the point, the imbalance wasn't caused by the government, it was caused by poor lending policies by the banks, and the proof is in the fact that it took so long to occur, look at your own chart, it wasn't until the early 2000's that the housing prices started to spike, long after any government action, and even then it didn't reach a fever pitch unti lthe mid 2000's, before that point prices were still pretty close to normal, the fact is that the banks loosened up their lending policies becuase they wanted to take advantage to rise in housing prices, low interest rates are probably a much bigger factor in rising home sales in the early part of the decade than any plan to expand housing.