NPR

10 Years After Housing Crisis: A Realtor, A Renter, Starting Over, Staying Put

In Phoenix, homes lost 56 percent of their value during the bust, plunging hundreds of thousands of homeowners underwater on their mortgages. The market may have rebounded, but many scars remain.
(Left) Sean Hahn is a realtor in Phoenix. (Right) Adriana Rodriguez is a former homeowner. Source: Caitlin O'Hara for NPR

Ten years ago, a slow-moving disaster shook the entire country: a financial meltdown that did not leave a single state untouched.

The main catalyst was a housing bubble.

Throughout the early 2000s, housing prices in some parts of the country rose, and rose, and rose. Homes with prices that for decades had steadily grown with inflation were suddenly worth 50 percent or 100 percent more.

The rapidly rising prices fueled extraordinary behavior. Home sales nearly doubled from 2000 to 2005. In some metro areas, prices were rising so fast that an investor could buy a house, sit on it for a couple months, and sell it for a profit.

For many homeowners, rising values made it attractive to refinance their mortgages and use their home equity to pay for other things — investment properties, remodels, cars.

Lenders let people pay more than they could afford for homes and devised extraordinary methods of doing so: loans described as "NINJA" (no income, no job, no assets), "liar" (no-verification "stated income" loans) and "exploding" (loans where the monthly payments would "explode" after a two-year promotional rate). Subprime lending soared.

Then, the bubble popped.

In 2007, home prices started to tumble. Homeowners began

You're reading a preview, sign up to read more.

More from NPR

NPR4 min read
Movies Cast A Spell In 'Show People'
Author Michael Newton waxes rhapsodic in his new book about a century of acting, with a special fondness for performances about performance; it's taken for granted how much we love movies.
NPR2 min read
Summer Walker: Tiny Desk Concert
One week after releasing a record-shattering studio debut, the Atlanta native brings a glowing R&B set to the Tiny Desk.
NPR4 min read
What's Behind The Research Funding Gap For Black Scientists?
Black scientists more often seek grants for community health studies, but molecular-level research proposals win more funding. More diversity throughout the process could help close the gap, says NIH.