>I suspect though, for better or worse, if we had to pay cash for a home, builders would simply be putting up inexpensive mobile-home style houses on tiny lots.

>I suspect though, for better or worse, if we had to pay cash for a home, builders would simply be putting up inexpensive mobile-home style houses on tiny lots. Suburbia would look very different from what it looks like today. There are other kinds of loans and different terms too. >It also seems likely that if the 30-Year Fixed went away, only the truly wealthy would be able to buy homes … to rent to the rest of us of course. The cheap credit drives up home prices. It's not actually an obvious aid to poor people. It discourages saving up for a house. Higher interest rates would drive prices down and make down payments easier to save up.