Demand-side economics: Low mortgage rates create a shortage of affordable housing by increasing demand. For example: -Speculators buying things and selling th

Demand-side economics: Low mortgage rates create a shortage of affordable housing by increasing demand. For example: -Speculators buying things and selling them for higher price later, that is a rational thing to do. -Normal folk who simply want a home rarely think long term, 50 years into the future, during which rates may vary and only look at what they can afford to pay monthly, right now. In a high interest rate, high inflation, high wage growth world houses are a BAD INVESTMENT because of erosion of value by inflation. What happens to bad investments? Their prices collapse, investors seek targets elsewhere. The only people who buy affordable housing in a high inflation environment are people who don't mind the deprecation in value and have a steady income to afford it.