Following the 2008 world financial crisis the US Federal Reserve and many other national banks introduced quantitative easing methods that effectively further inflated the housing market bubble without properly addressing the corrupt banking practices that led to the crash. This has just allowed this housing bubble to get bigger as the reforms to lending practices remain slow. If the rate at which the financial processes that caused the last recession are reformed remains slow, while economic inflation continues, there will be another economic crisis that some economists feel will be worse than the last.
Economists such as Peter Schiff, one of the few economists to predict the 2008 financial crisis, have warned that the overvaluation of housing prices compared to income in the US is following a similar pattern to the pre-2008 housing market. Schiff has also pointed out the possibility of a generational shift that may further accentuate this dynamic of over-inflation of the housing market, stating that “according to one study, millennials earn approximately $10,000 less than members of Generation X and will likely make around $100,000 less over the course of their careers. On top of that, they are saddled with over $1 trillion in student loan debt” . With the cause for the last financial crisis, the housing crisis, not being resolved, the bubble has just been inflated further, however with the next generation of homeowners being worse off financially the next housing crisis will be worse, making the likelihood of a similar economic crisis worse also.