How Low Mortgage Rates Will Help Prevent Another Housing Crash

Mortgage rates have been at or near record low levels for quite some time.  Much of this is a byproduct of low rates from the Federal Reserve to the banks, which are able to pass along the low cost of borrowing to their customers.

The hope is that the low rates will encourage more home purchases, allowing for a recovery in the housing market.

The results have been mixed, at least if you look at the news.  Though rates have been low for a few years now, only within the past few months have I seen a lot of news articles proclaiming that there actually is a recovery in the housing market.

I believe that these rates will help the market, but more in a long term way.  This is unusual as most policy these days is only focused on the short term effects.  After all, if the United States government has been kicking the Medicare and Social Security cans down the road for decades now, it pretty much shows that nothing long term is ever in the forefront of anybody’s mind.

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