Stock Markets Exposed

Do you think the stock market crash will affect our housing market?

After all if interest rates keep rising surely we will join the Americans and start defaulting on our mortgages. House prices may then fall and we could all end up in recession. What do you think. the stock market lost millions today in value - I'd call that a crash. It all started because interest rates went up in America and people with huge mortgages couldn't afford it. Over here interest rates have gone up dramatically and their are many people with hefty debt. Its not hard to see a pattern emerging here surely or am I the only one.

Public Comments

1. dont think so the pound is strong
2. This is a buying opportunity, sweet huh?
3. The stock markets haven't crashed. House prices are levelling and the boom has finished.
4. I am not an economist but I noticed a trend. The opposite of what you’re saying. When share prices fall, property prices go up and vice versa.
5. Its already happening in the US. People are losing their homes because they bought more house then they could afford. Now there are so many homes for sale, really cheap.
6. At this point I see nothing that will stop this runaway train. Even if interest rates drop this will continue. Anybody who was watching knew this was coming. The bills always come due. The next three of four years will be hard for the average American.
7. Stock market hasn't crashed...re-read the story. Americans are in default because their eyes are bigger than their pockets. Meaning they own 2 or 3 brand new vehicles, a huge house and buy meaningless junk to keep up with their neighbors.
8. The stock market has NOT crashed. And with recent UK inflation figures of only 1.9%, the future looks good for low interest rates. Now stop fretting. Stocks go up and down, interest rates go up and down, and (though many seem oblivious to it) house prices go up and down. I am hopeful house prices WILL fall. The prices cannot keep climbing at current rates forever, pricing out ordinary people. What is the point of having a house valued at £250,000 if no one can afford to buy it? A dip in fortunes in the housing market does not signify recession. Recession is negative growth (a shrinking economy.) Just look at it this way. Everything has an opposite right? If interest rates go up, that is not good for all you people who foolishly borrowed more than you could afford, but for thrifty savers it is fantastic news.
9. What housing market. I dont think it could get anyworse. but hey I do live in MI so what the hell am I talking about
10. I hope we will be able to not to be effected by the problems. I think that the Buy to Let market is stopping young people being able to afford to get onto the ladder as they have forced the prices way up to quickly, not the ordinary people who buy the extra one or two place to help with their pension, the average Joe who works in shops, factories, bus driving, postmen, milkmen office workers, are all well below what they say is the average wage. Perhaps a higher tax rate if they own more than 10 houses would help.
11. I hope not. I only have 7 more years to go on my mortgage and the house will be mine. I have a very small investment on the FTSE 100 and I do worry about it losing money, as it did in the early 2000s.
12. It is the over valued housing market which has lead to a credit crunch, which in turn, is affecting the stock market. The real reason that the BOE has been raising interest rates is to try to contain the housing market, not to reign in inflation. This problem has been coming for a very long time, and follows years of irresponsible lending. Banks and other financial institutions are now plagued with risky debt on their books, much of the funding having come from the money markets. The housing defaults in America have alerted the lending institutions that they can no longer afford to continue lending at current levels and money market interest rates are been driven up. I very much doubt that the BOE will raise rates again, because they can now see that recession is probably on its way due to consumers reigning in their spending. House have been grossly over-valued for a long time. This is a necessary correction.
13. This crash is a knock on effect of the Iraq war which cost an estimated $2,000,000,000,000 and prevented the USA from holding down interest rates. The Iraq war was caused by Israeli supporters in the White House, check it out below.
14. When America coughs we sneeze so it is always a possibility. If there is a crash then it won't just be house prices, it will be jobs, prices, just about everything you can think of. This is the worst scenario and we have had these scares before. I think we can assume though that Gordie's spend, spend spend and tax, tax, tax policies won't help. Chickens always come home to roost with profliigate politicians.
15. Shareholders and Investors. Thats where the present problem lies. It was not a market crash, what happened was that the US finance houses lent billions of dollars to the "Sub-Prime Market" (people with poor credit history). These porfollios of lending finance were offered to finance houses all over the world and many of them (including Uk banks) bought into this lending spree. Of course, many of the sub-prime borrowers have now defaulted on their mortgages so the investors decided to try to pull their funds out of the Investment Portfolios. Alas, the withdrawal of the funds was refused. Now every financial establishment are suspicious of dealing with eachother (investing in each others investment opportunities) because non of them know how involved the other has been in the sub-prime market and how much the other will eventually lose. So once again it looks like the shareholders and investors (the same people who are whinging about the mortgage rates) are the cause of this problem. I suppose they saw the lending of funds to the Sub-Prime market at a higher than usual interest rate as a way to earn a fast buck. I am glad it all turned to Rat Sh!t for them!
16. you bet ye, the banks have already stopped lending which in turn will push up interest rates, which in turn will create a higher default rate in the sub prime.
17. ah funny one, well the rich try to stay on top,, but we see little by little God has a plan and humans cant over do him,, where will poor people live,, so called middle class as well,, houses are way to much,, its a joke,,, the system will fail,,, read your bibles if you can! it will FAIL as we see each year..