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House Flippers Inflated the Housing Bubble, Report Says
House Flippers Inflated the Housing Bubble, Report Says | AOL Real Estate
They're just figuring this out now? I read an article a few years ago that stated that 75% of all new homes purchased in 06 and 07 were sold to speculators.
LAS VEGAS -- A new federal report shows that speculative real estate investors played a larger role than originally thought in driving the housing bubble that led to record foreclosures and sent economies plummeting in Nevada, California, Arizona, Florida and other states.
Researchers with the Federal Reserve Bank of New York found that investors who used low-down-payment, subprime credit to purchase multiple residential properties helped inflate home prices and are largely to blame for the recession. The researchers said their findings focused on an "undocumented" dimension of the housing market crisis that had been previously overlooked as officials focused on how to contain the financial crisis, not what caused it.
More than a third of all U.S. home mortgages granted in 2006 went to people who already owned at least one house, according to the report. In Arizona, California, Florida and Nevada, where average home prices more than doubled from 2000 to 2006, investors made up nearly half of all mortgage-backed purchases during the housing bubble. Buyers owning three or more properties represented the fastest-growing segment of homeowners during that time.
House Flippers Inflated the Housing Bubble, Report Says | AOL Real Estate
They're just figuring this out now? I read an article a few years ago that stated that 75% of all new homes purchased in 06 and 07 were sold to speculators.