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Elon Musk, the CEO of Tesla, frequently expresses his ideas on Twitter, including his thoughts and actions on cryptocurrencies and his opinion that Tesla stock prices are excessively high.
It would be an oversimplification to claim that Elon’s ideas may affect markets after the latter tweet, which reduced the company’s worth by $14 billion in just seven words.
In response to a message from Dogecoin co-founder Billy Markus, who uses the Twitter handle Shibetoshi Nakamoto, Musk has now concentrated on the housing bubble burst.
![Elon Musk on the Housing Crisis: "They Dug Their Own Graves"](https://recentpush.com/wp-content/uploads/2022/09/Elon-Musk-1024x723-1.jpg)
What Caused the Housing Bubble to Burst? Predatory Lending?
Markus stated in the tweet that the fairly heavy central bank control that followed the 2008 recession and the massive cash printing and rescues that resulted led to the creation of crypto.
Since there was essentially no one in control of cryptocurrencies other than an established mechanism, they could resist manipulation by governments due to their decentralized nature.
Markus also attributed the 2008 crisis to predatory lending practices that were in place at the time and allowed borrowers who had not previously been approved to buy homes with little to no money down and initially affordable mortgage payments that inflated over time.
Related: Understand Putin’s next move after the invasion of Ukraine. (Interesting article)
Musk completely disagrees, saying that “They Dug Their Own Graves”
Musk responded to the tweet by stating that the main error made during the 2008 recession was probably thinking that real estate prices would only rise
He was particular to emphasize the fact that he does not favor predatory lending, however, he also stated that many of those same lenders were severely injured or died as a result of the housing market collapse. “They prepared their own graves, which is a valuable lesson we should all probably remember, including me,” he stated.
According to Musk, it was the bankers’ “axiomatic error of judgment” that home prices could never collapse that led them to relax and enjoy lending rules and ultimately to their downfall.
What have we learned from the present housing market?
With rising interest rates and inflation causing chaos in the present real estate market, it remains to be determined whether the lessons learned from the housing crisis 14 years ago have really been implemented.
![Elon Musk on the Housing Crisis: "They Dug Their Own Graves"](https://recentpush.com/wp-content/uploads/2022/09/Elon-Musk-3.jpg)
Following the COVID-19 pandemic in 2020, prices experienced a sharp rise as remote work transformed the housing market and individuals rushed to acquire at any price out of concern that prices would continue to rise.
The interest portion of monthly mortgage payments has surged for new purchases due to the recent spike in mortgage rates, which have doubled in a matter of months. This may add an extra $1,000 or more to the payment and actually make it a little less feasible.
The increase in home prices has come to an abrupt halt due to the affordability crisis, but only time will tell if the housing market will be more robust this time.
Hopefully, the key lesson Musk probably drew from the 2008 financial crisis—that property prices don’t continue to rise stuck with people in 2022.
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