While the U.S. economy has shown some signs of recovery following the financial crisis, high unemployment and limited access to consumer credit have plagued the recovery, and the American economy is still struggling.
After the 2008 burst of the housing bubble, a rise in the number of foreclosures and the weight of sub-prime mortgages forced the American economy into one of the deepest financial declines in history. As home values plummeted, homeowners were left upside-down and underwater on their mortgages, thereby affecting the economy, because consumer spending partially relies on the ability of homeowners to cash out equity to make big purchases, according to The Guardian Express.
Many potential homebuyers have found it difficult to obtain a home loan due to stringent down payment requirements and other regulations, which could possibly drag down the recovery. Potential homebuyers have also remained wary of falling home prices, and many are waiting to pay down student loan debt and credit card debt before jumping into a home purchase.
High unemployment rates have also forced many homeowners into foreclosure and reduced the number of potential homebuyers, both of which slow the recovery in the U.S. housing market. Consumers have remained cautious about their spending and finances as the job market remains constricted, The Guardian Express reports.