The burst of the housing bubble that contributed to America's "Great Recession" hit Florida homeowners hard. The nation's mortgage crisis meant that homeowners who could no longer afford their mortgage payments lost their homes to foreclosure. In recent years, America's economy has rebounded, and some fear we are headed to a second mortgage crisis.
According to economists, the recent uptick in prices on "McMansions" -- that is, homes larger than 3,000 square feet -- spells trouble for the U.S. economy. Low interest rates have encouraged some people to purchase large homes. In fact, back in May, around 794,000 large homes were built in the United States, and the price of these homes is quickly rising.
At their highest point, the median price of a McMansions sat at around $520,000. During the worst years of the Great Recession, these homes saw a median price of around $362,000. Since then, the median price of McMansions has picked up quicker than the median price overall of homes in the United States.
According to one professional, the rise in McMansion can be attributed to a "keeping up with the Jones's" attitude. Therefore, he believes the Federal Reserve should increase interest rates before another housing bubble bursts.
But, he acknowledges that the central bank may not be able to do so quick enough, since it is still dealing with the aftermath of the Great Recession. From January through March of 2017, the nation's economy only saw a growth of 1.2 percent.
It remains to be seen whether we are going to experience another mortgage crisis. Those homeowners who are looking to purchase a home or who are having trouble keeping up with their mortgage payments may want to seek the advice of an attorney.
Source: Newsweek, "Big Houses In The U.S. Are Back (And There's A Growing Housing Bubble," Graham Lanktree, July 4, 2017