List Only

How does the housing crisis have a direct or indirect impact on the economy?

Could someone explain to me in detail how the housing crisis has influence on the economy. What, Where, and How?

Public Comments

1. For most people a house is the biggest purchase/asset they will do or have. When the price of housing is significantly dropping people losing their life savings. these people will have significantly less discretionary purchases that drives the economy. 3/4 of U.S economy is personal consumption. Less purchases in almost every sector of the economy means companies are loosing billions dollars, and thus are devalued in stock markets and forced to layoff people Banks are stuck with the bills of covering the mortgages when people cannot pay, while bigger banks survived by halving their assets, smaller banks failed. More Layoffs... the vicious cycle goes-on until the economy bottoms-up
2. Demand for Houses = Demand for: welders, masons, carpenters, Home Depot workers, lumberjacks, brick factory orders, pipe factory orders, PVC factory orders, delivery drivers. More neighborhoods need more Starbucks, Wal*Marts, IKEA's and Shell Stations who need clerks, coffee, swedish furniture and Chinese crap to fill their shelves. Take away the Demand for Houses....what happens?
3. Carpenters put out of work, makers of washing machines, stoves, etc, put out of work, lumber mills stop production.