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No I don’t think that argument holds. A hand out is not a loan. It’s also possible that even if loans raise home prices, that there’s a floor to this effect if
by oneoff786 5y ago
No I don’t think that argument holds. A hand out is not a loan. It’s also possible that even if loans raise home prices, that there’s a floor to this effect if loans are shrunk.
Many companies and people buy homes currently for investment rentals. They’re competing with homebuyers. Strictly speaking I would expect the share of homes owned by landlords to rise even if prices fall.
- vkou 5y ago> A hand out is not a loan. It has the same inflationary effect on the economy. Under fractional reserve banking, loans inject money into the economy, increasing prices. The lower interest rates are, and the longer mortgage terms are, the more such money gets injected.