What Were the Effects of the 2008 Mortgage Crisis?

The 2008 mortgage crisis directly resulted in an increasing number of home foreclosures, a drop in home sales, a stock market crash, and eventually the Great Recession. Despite government assistance programs designed to add liquidity to the market by purchasing banks' subprime mortgages, the stock market plummeted further in 2009.

Among many other issues, the effects of the 2008 mortgage crisis included:

• Long-term high unemployment rate

• Low household net worth

• Increased number of home foreclosures

• Banking impairments, i.e., loss of stock wealth and high delinquency rates for adjustable-rate mortgages

• Employee-sponsored savings decline

• Loss of output and income from the United States gross domestic product (GDP)