Are Housing Prices, Household Debt, and Growth Sustainable?
Levy Economics Institute, Strategic Analysis Series, January 2006
12 Pages Posted: 9 May 2011
Date Written: January 2006
Abstract
Rising home prices and low interest rates have fueled the recent surge in mortgage borrowing and enabled consumers to spend at high rates relative to their income. Low interest rates have outerbalanced.
The growth in debt and acted to dampen the growth in household debt-service burdens. As past Levy Institute strategic analyses have pointed out, these trends are not sustainable: household spending relative to income cannot grow indefinitely.
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