Question

In the years leading up to the financial crisis of 2008–2009, the market for housing can be best described as

booming, driven by rising prices and increased demand due to low interest rates.

booming, driven primarily by increased demand due to rising interest rates.

stagnant, with no large variation in growth rates.

crashing, as housing demand had declined severely since the early 1990s.

Answer 1

Answer:

a. booming, driven by rising prices and increased demand due to low interest rates.

Explanation:

Years before the financial crisis of 2007-2009, cheap credit and loose lending regulations fostered a housing bubble. When the bubble broke, financial institutions were left with trillions of dollars in subprime mortgage investments that were nearly worthless. Millions of homeowners in the United States have discovered that they owe more on their mortgages than their homes are worth. Many people lost their jobs, finances, or houses as a result of the Great Recession that followed.

The housing market was booming in the time leading up to its breakdown and the onset of the 2008–2009 financial crisis. Demand for housing increased as interest rates fell and many renters purchased homes. The general belief was that housing prices could only increase. Large building projects in several states were completed to meet rising demand and, as a result, the financial crisis hit these states extremely hard.