Housing prices are on a rise. While they have been rising from people leaving big cities due to the pandemic, they were rising beforehand too. Additionally, the price of stocks and bonds have been rising too. This global market boom in price is caused by "easy money". Easy money is defined as money that is obtained at relatively low interest. Interest is low because central banks have been lowering interest rates to stimulate growth. The problem is that this money keeps on flowing into financial markets. This rapid spike has reached levels last seen in 2000 2008 which was known as financial bubbles. To put it in perspective, over 400 out of 484 cities have reached housing prices that are far beyond reach of the typical family. The least affordable being New York City.
The response that is being concerned is tighter regulation. The problem with this if regulators clamp down on mortgage lending, investors will likely move to stocks and bonds instead. Money will continue to shift from one market to another as long as easy money exists.
What do you think could be a possible solution? Do you think elections will cause any sort of rapid change in this?
link: https://www.nytimes.com/2020/10/31/opinion/real-estate-home-prices-covid.html
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