Interest rates. Once interest rates go up, the housing boom will come to a complete halt. People are only building/renovating right now because interest rates are so low, they can finance the insane amounts of money it takes to do their projects at 2-3x cost since building materials have gone up that much in the last year. Once it is no longer affordable to finance a $500k loan on a $300k new house, boom.
What if the Fed never raises interest rates ever again, because they fear the consequences of doing so for everyone involved (gov, corporate America, individuals)
The debt bubble has to blow at some point. They have to raise rates as a balancing act and last I was reading a few weeks ago we are due. May be a very small rate change like 1% that might not have much of an effect, but a huge jump would definitely scare off a large portion of borrowers.
Fed already has said rates will be at 0 for at least a few years though...........by that time another crisis will likely happen that, assuming things didn't collapse by then, would force them to re-commit to keeping rates at 0 again....
Interest rates. Once interest rates go up, the housing boom will come to a complete halt. People are only building/renovating right now because interest rates are so low, they can finance the insane amounts of money it takes to do their projects at 2-3x cost since building materials have gone up that much in the last year. Once it is no longer affordable to finance a $500k loan on a $300k new house, boom.
What if the Fed never raises interest rates ever again, because they fear the consequences of doing so for everyone involved (gov, corporate America, individuals)
The debt bubble has to blow at some point. They have to raise rates as a balancing act and last I was reading a few weeks ago we are due. May be a very small rate change like 1% that might not have much of an effect, but a huge jump would definitely scare off a large portion of borrowers.
Fed already has said rates will be at 0 for at least a few years though...........by that time another crisis will likely happen that, assuming things didn't collapse by then, would force them to re-commit to keeping rates at 0 again....