Housing market affects stock market

The subprime spillover is now affecting the stock market. The liquidity crunch causes banks to fail and business to panic. The reality is that we have a twin decline in both housing and financial markets are subprime spillover casualties.

The housing market is affected by falling prices of homes. The rush to sell in both the housing market and stock market will drive down prices. We have a record supply of unsold homes and dramatic decline in people buying houses due to bank not extending credit.