Everybody knows what caused the housing bubble, with its breathtaking, though ephemeral, increase in prices, right? A long run of low mortgage interest rates, loose lending and low (to nonexistent) downpayment requirements are the usual culprits cited by experts. But those factors can be blamed for only a small part of the bubble, according to research published this week by economists Edward Glaeser and Joshua Gottlieb of Harvard University and Joseph Gyourko of the Wharton School at the University of Pennsylvania. They write: “It isn’t that low interest rates don’t boost housing prices. They do.”
Diana Golobay was a reporter with HousingWire through mid-2010, providing wide-ranging coverage of the U.S. financial crisis. She has since moved onto other roles as a writer and editor.see full bio
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The story for the housing market over the past three years has been, “Home sales are down, home prices are up.” Because inventory was so restricted after the pandemic, prices pushed higher even as demand weakened. That story may finally be inverting as unsold inventory of homes is now great enough that home prices are […]
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Diana Golobay was a reporter with HousingWire through mid-2010, providing wide-ranging coverage of the U.S. financial crisis. She has since moved onto other roles as a writer and editor.see full bio