Short Term Consequences of the Housing Bubble

The housing bubble has many effects. What are the pluses and minuses of this housing bubble?

Short Term Pluses ( while the housing bubble has not popped)

• 'Helping' the economy
• Jobs being created
• Strong consumer spending
• Rising amount of assets

Short Term Minuses ( while the housing bubble has not popped )

• Significantly reduced amount of affordable housing to buy
• People stretching and overextending themselves to buy houses ( 'house poor')
• Lack of investment in export orientated industries or R & D ( research & development )
• Contributes to the trade deficit by encouraging more spending by people using home equity loans