Housing Crisis and how to reduce risk

[Adriana Galvez]

Many of the middle to lower class suffer the consequences of a housing crisis. What causes this? It is said that due to inflation the volatility of pricing on the housing market can fluctuate depending on one sole factor, the Federal Reserve. To create an equilibrium of ease, T-bills a.k.a Treasury bills, also Treasury Securities can be purchased. These are considered investments. 

Taxes are a certainty regardless of where anyone stands financially, so the yield return of investment referring to the capital gain received will be taxed. Tips (Treasury Inflation-Protected Securities) creates a fixed rate on the original principle which helps protect your investment risk to a minimum depending on how high or low inflation stands. The U.S. department of Treasury sells these bonds directly with no hidden fees, or they can be purchased in the secondary market which require a fee per purchase. 

In good faith, these bonds are purchased to help prevent inflation from rising. The up-side, interest rates decrease on housing and other governmental-economical issues can subside reducing risk. The down-side interest rates rise on housing and inflation continues to increase.

Sources: https://home.treasury.gov/resource-center
https://www.fidelity.com/fixed-income-bonds/individual-bonds/us-treasury-bonds
https://www.treasurydirect.gov/forms/sec0011.pdf