- The bubble in the housing market today is bigger than it was before 2008. And it exists for the same reason - the central bank has held interest rates artificially low for nearly two years.
- QE creates artificial demand for Treasuries, thereby keeping rates low and facilitating more federal government borrowing and spending. It also keeps mortgage rates artificially low.
- This is a massive housing bubble and the Fed is holding the pin - it’s about to raise interest rates. Mortgage rates will go up right along with them. And the Fed has already tapering its purchase of mortgage-backed securities.
For further details see:
It's Another Housing Bubble And The Fed Is Holding The Pin