Money Pressure is what drives housing prices


The concept is simple.  Imagine an average income.  Say, $70k for a couple.  Imagine no debts, and ability to acquire a down payment.  Imagine the government changes the mortgage rules such that this couple can now qualify to borrow twice as much as they used to.  Imagine now this couple and many others compete to purchase a house.  False desperation and emotional decision making lead to a bidding war on “omg this one is perfect” house.  Imagine the Canadian Housing Bubble.

“It’s not people who buy houses, it’s people with mortgages that buy houses.”


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