The problem isn’t low interest rates, it’s affordability. If we put homes at 15% interest the only people walking away happy would be banks because neither buyers or sellers are getting anything from it. The last time asset prices were that high was what the 70s during a market crisis.
Low interest rates, especially rates that stayed low for way too long, were one of the main causes. If loans are cheap and saving is pointless, you get a debt crisis.
But it's far too late for high intereat rates to fix the problem.
Zero immigration will destroy demand and crash the market, bringing prices down with it. Probably the best we can hope for, at this point.
Higher interest rates lower all asset prices. Young people are asset low and labor income high. They want low asset prices. It's people who already own assets that want low rates. Higher rates benefits young people.
No… it’s because wages haven’t met inflation for over 30 years now. If we jacked up interest rates right now the housing economy would collapse in a decade because no one would sell what they bought and no one would buy.
The problem isn’t low interest rates, it’s affordability. If we put homes at 15% interest the only people walking away happy would be banks because neither buyers or sellers are getting anything from it. The last time asset prices were that high was what the 70s during a market crisis.
Low interest rates, especially rates that stayed low for way too long, were one of the main causes. If loans are cheap and saving is pointless, you get a debt crisis.
But it's far too late for high intereat rates to fix the problem.
Zero immigration will destroy demand and crash the market, bringing prices down with it. Probably the best we can hope for, at this point.
Higher interest rates lower all asset prices. Young people are asset low and labor income high. They want low asset prices. It's people who already own assets that want low rates. Higher rates benefits young people.
Young people are asset low and labor income low. That's the problem.
Their labor income seems low because asset prices are so high.
No… it’s because wages haven’t met inflation for over 30 years now. If we jacked up interest rates right now the housing economy would collapse in a decade because no one would sell what they bought and no one would buy.
Their labor income seems low because it is low.