As a result the recession which was imminent till now has started to take shape and become apparent. The main risk that is faced by this recession is that it is due to increase inflation and prices in the country while decreasing the worth of the dollar resulting in massive losses and bad position of credit for the prime market as well. “The mortgage crisis, however, has turned for the worst and is threatening to turn into a recession. Other factor like the widening credit spreads and the oil-fed inflationary pressure have economists worried.” (‘Is the US going into recession’, 2008)
The prices of houses are mostly determined by the supply and demand mechanism in the free market. When the demand for houses rises faster than the supply of houses, then the prices for the housing goes up. Similarly when the supply of the houses rises faster than the demand then the prices of housing tends to go down. In most cases the prices tend to increase with the increasing trend for rise in demand. However in a more realistic market supply and demand is only one of the factors affecting the price of housing and property. The following mentioned factors have lead to the increased demand for the houses in the US.