Two thoughts on housing: 1) One component of housing is how much money banks are willing to loan for the house. So 'easy money' environments will boost prices,

Two thoughts on housing: 1) One component of housing is how much money banks are willing to loan for the house. So 'easy money' environments will boost prices, apart from the quality and size of the house, the desirability of its location, and the circumstances of the buyer. In the mid 2000's, a lot of loans were made based more on bank's willingness to lend than on the other factors. 2) To hold on to a house, someone has to pay the carrying cost. If the carrying cost goes up past the ability of the owner, the house is sold or foreclosed on (or rooms are put on AirBnB, etc). In 'easy money' environments like the one created in the early 2000's and sustained since then, carrying costs have been kept low. If they go up, as they did briefly during the financial crisis, house prices will drop. The pattern seems to be to keep the money easy, so it's hard to say house prices are too high, even though their traditional relationship with income is out of whack.