The US Housing Market and the Subprime Mortgage Crisis (A)



Case Details Case Introduction 1 Case Introduction 2 Case Excerpts

Abstract

From 2006 onwards, real estate markets in different regions in the US experienced declines in house prices, after a period of double-digit growth rates between 2000 and 2005.

These declines in house prices, coupled with rising interest rates seriously affected the borrowers of subprime mortgages, with a large number of them defaulting on their loans. The high rate of defaults in subprime loans was seen as an indicator of the worsening situation in the housing market and the US economy as a whole. ....

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Issues

The case is structured to achieve the following teaching objectives:

  • Learn about the evolution of the US mortgage market.
  • Understand the reasons for the crisis in the US housing market.
  • Understand the role of the different players in creating the crisis.
  • Discuss the benefits to the US economy from the growth in subprime lending, as well as the problems
Contents
Introduction
Background Note
The US Mortgage Market in the Early 2000s
The Crisis
Some Perspectives
Outlook
Exhibits

Keywords

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