Unidad Educativa Computer World

Name: Domenica Aruz

Current Events
Lab Work
1. Look for information about housing crisis in USA
Given problems with regulations in some states, particularly restrictions on new
single-family home development, the uptick in housing prices threatens both
prospective owners and renters, forcing people who would otherwise buy into
the rental market. Ownership levels continue to drop, most notably for
minorities, particularly African Americans. Last year, according to the Harvard
study, the number of renters in the U.S. rose by a million, accompanied by a net
loss of 161,000 homeowners.
This is bad news not only for middle-income Americans but even more so for
the poor and renters. The number of renters now paying upward of 50% of their
income for housing has risen by 2.5 million since the recession and 6.7 million
over the decade. Roughly one in four renters, notes Harvard, are now in this
perilous situation. The number of poor renters is growing, but the supply of new
affordable housing has dropped over the past year.
2. What is the housing bubble crisis?
A run-up in housing prices fueled by demand, speculation and the belief that
recent history is an infallible forecast of the future. Housing bubbles usually start
with an increase in demand (a shift to the right in the demand curve), in the face
of limited supply which takes a relatively long period of time to replenish and
increase. Speculators enter the market, believing that profits can be made
through short-term buying and selling. This further drives demand. At some
point, demand decreases (a shift to the left in the demand curve), or stagnates
at the same time supply increases, resulting in a sharp drop in prices - and the
bubble bursts.