By Manav Tanneeru, CNN
January 29, 2008
The U.S. economy is clearly in terrible shape. What is less clear is how we got here.
Opinions vary on when and where to begin the story, but many experts trace the origins of the current economic situation to the housing bubble that came about earlier this decade.
Housing prices jumped at a rate above 6 percent in 1999 and increased rapidly and steadily as the decade turned, according to a recent study by the Brookings Institution.
“After the mid-1990s … real house prices went on a sustained surge through 2005, making residential real estate not only a great investment, but it was also widely perceived as a very safe investment,” the study said.
The prices eventually moved “out of line with fundamentals like household income” and the bubble formed, the study said.
Continue reading How a ‘perfect storm’ led to the economic crisis
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