Quote:
Originally Posted by blankall
The reasons for this recession are a lot more complex than just raising interest rates. Not a lot of good options unfortunately.
The other side of the coin is that if you have low interest rates and high taxes, your could end up seeing housing affordability spiral further out of control.
|
In my opinion housing affordability is based on supply as the demand will always be as much as people can borrow. Higher interest rates don’t change housing affordability as the payment remains constant as value fluctuates with interest rates. So it’s just a transfer of wealth from existing owner to bank.
But there would certainly be unexpected consequences from tax increases. I think the interest rate increases affect certain people much more severely then a general tax increase to reduce money supply. But the tax increase would affect more people less severely.