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.”
Low interest rates didn’t cause the bubble, economists say
Most Popular Articles
Latest Articles
Did lower mortgage rates slow housing inventory growth?
After two weeks of significant increases, my model for inventory growth with higher mortgage rates came crashing down last week.
-
Labor market report is good news for mortgage rates
-
Virginia Realtors: Zillow’s touring agreement may not be legal
-
Low inventory creates challenging conditions in North Carolina’s housing market
-
Tri-state area housing shortage could cost the region economically
-
Remote reverse mortgage counseling now permanently permitted in Massachusetts