Then they shouldn’t have allowed interest only loans, they shouldn’t have allowed 100% financing either, because banks will collapse left and right. Also, if rates were higher, people would be more likely to save their money, and earn a higher interest rate, and they would be less likely to borrow money at a higher interest rate.
Housing prices would then be much more consistent, and less volatile(they wouldn’t be so inflated, so yes, they would be much lower) and anyone with some common sense and patience, would be able to save up for a reasonable down payment, buy a home at a reasonable price, and have a reasonable mortgage in which the PRINCIPLE debt actually gets paid off.
