Re:Home Price to Income Ratio
by lordnacho on Monday September 20, 2021 @03:25PM
(#28597738)
As described by Freakonomics and general economic education, this is more or less right.
However keep in mind there's two kinds of rent. You can rent a house, or you can rent money and buy a house.
Historically and across countries there's been some willingness to restrict mortgage LTVs and interest-to-income ratios. At least in some European countries the interest ratio depends on a fixed interest rate (eg 5%) rather than the current interest rate.
We can create and destroy money more easily than we can create and destroy homes, maybe that's a worthwhile lever to try.
However keep in mind there's two kinds of rent. You can rent a house, or you can rent money and buy a house.
Historically and across countries there's been some willingness to restrict mortgage LTVs and interest-to-income ratios. At least in some European countries the interest ratio depends on a fixed interest rate (eg 5%) rather than the current interest rate.
We can create and destroy money more easily than we can create and destroy homes, maybe that's a worthwhile lever to try.