Keeping Housing Rolling Along

Discussion in 'Economics' started by FireWalker, Nov 29, 2005.

  1. I'm curious on ideas on how the fed might inflate the housing market further (or at least keep it stable). From the fundamentals, I don't see how the market has anywhere to go but down. But keeping it up is critical.

    If they lower rates to 1%, with housing prices already beyond the affordability of 80-90% of the public, would even a 1% mortgage bring in much "real" demand? 70% of the public already owns a home anyway. And you can't get much better than $0 down, infinite year mortgages (interest only). Maybe the next step will be for the Fed to offer to make your down payment?

    Who's left to buy?
    - illegal aliens are already in
    - speculators need to be kept in the game
    - foreign buyers maybe? (drop rates, falling dollar, and their exchange rate makes housing cheap for them)

    Just curious if anyone has any ideas on what the fed might do to keep the party going.