Housing bubbles, student debt and stagnant salaries – does America need a reset? Let our experts explain.March 20, 20192 min read
There’s an old saying we all know about those who don’t pay attention to history … they’re doomed to repeat it. Over and over and over sometimes.
One would think after the 2008 housing crisis that nearly decimated the American and global economy – that we’d all be somewhat wiser. According to some, that may not be the case.
America is once again approaching the same cliff it took a decade to climb up from. The measures that were put in place to prevent massive amounts of foreclosures a decade ago are now coming home to roost.
“This massive problem of underwater homeowners could not be resolved only by shutting off the spigot of foreclosures. That is why a total of 25 million permanent mortgage modifications and other so-called “workout plans” were put in place from 2008 until June 2018 according to data provider Hope Now.
Modifying mortgages as an alternative to foreclosure just kicked the can down the road. It succeeded in bringing these delinquent homeowners into current status. Yet millions of them are re-defaulting on these modified mortgages. The number of re-defaults is increasing relentlessly around the U.S. Worse yet, many re-defaulters are on their second- or third mortgage modification.” - MarketWatch
Mortgages once again are vulnerable as the housing market remains painfully out of sync with the rest of the economy. As well, with millennials facing massive student debt, a shortage of new builds means fewer people can enter the market nor can they afford to. Combine that with salaries flatlining and not keeping pace with the rising price of goods – it’s not a sunny forecast.
Are you covering this potential financial crisis?
- What will America have to do to course correct and ensure we don’t have a repeat of the 2008 meltdown?
- And how did the country’s leaders allow this to happen? Did no one see this coming?
- There are a lot of questions and that’s where the experts from the New Hersey Institute of Technology can help.
Professor Michael Ehrlich's research focuses on financial markets and institutions, with an emphasis on market failures. He has written about the unintended consequences of financial market innovation and is Associate Director of the Leir Center for Financial Bubble Research. Michael is available to speak with media regarding this issue – simply click on his icon to arrange an interview.
Michael Ehrlich Associate Professor of Finance and Co-Director of NJ Innovation Acceleration Center
Professor Ehrlich's research focuses on financial markets and institutions, with an emphasis on market failures