Banks, having surplus cash, offer low-monthly-payment loans which allows more people to buy them, by the way earning 0.6-0.8 * X to the banks.
Since there is a lot of cheap credit price stops constraining the demand side. You can get almost arbitrary large loan with arbitrary long timespan. This causes prices to rise. Houses seem like good investment so wealthy buy them restricting supply side, causing prices to rise even higher.
Rising prices make it impossible for most to save for the house. They have to take loans.
Now poor people who want house need to pay the inflated price + credit fees on top of that. Sellers see their assets rise in value, creditors see more customers and more revenue.
If there was no cheap credit then the prices wouldn't rise so much because nobody would be buying them.
Now, I don't know how true is all above but that seems to be the explanation of the issue I've seen many times.
Since there is a lot of cheap credit price stops constraining the demand side. You can get almost arbitrary large loan with arbitrary long timespan. This causes prices to rise. Houses seem like good investment so wealthy buy them restricting supply side, causing prices to rise even higher.
Rising prices make it impossible for most to save for the house. They have to take loans.
Now poor people who want house need to pay the inflated price + credit fees on top of that. Sellers see their assets rise in value, creditors see more customers and more revenue.
If there was no cheap credit then the prices wouldn't rise so much because nobody would be buying them.
Now, I don't know how true is all above but that seems to be the explanation of the issue I've seen many times.