The “crazy” loans were in part crazy because of the low rates. The laxness of lending didn’t help either, but we need to be clear about what we are referring to: high house prices, credit crunch, or economic downturn. What is significant is that we’ve had a fairly brisk pace of home price appreciation from 2012-14 tighter lending standards notwithstanding. That begs the questions of what is the overriding driver of home prices. It might be that it depends on when we talking about. Currently, we have a significant shortage of supply which has been shown to track price increases.
