I would just like to add that it wasn’t merely the low interest rates which caused the housing price to increase. I believe it is the direct correlation between the low monthly payment on the teaser rate that allowed people to buy more expensive homes they otherwise would not
The price increase is tied directly to the low teaser monthly payment. Some of those initial teaser rates allowed the mortgage payment to be just slightly higher than what rents would be.
All shortsighted, of course. No one thought about when the rate adjusted, or cared. They were going to flip or take money out or whatever.
There will be more people in the rental market as they get evicted from their foreclosed homes. Therefore, the vacancies will be low. I think the rents will increase because of the mere demand. Predatory renting, so to speak. People will stretch their budget for a while. But ultimately, it can only go so high compared to incomes.
