House prices go up by 9,6% every year in many states in the USA on average...

So far, this has had not many negative effects as the salaries have also risen and Bush has lowered taxes in 2000 and 2001. Greenspan has also kept the interests rates at a low level. This way, people consumed a lot...and they spend most of the money using credit cards without even owning the money they spend....and still everyone gets a mortgage on a house easily as nowadays, they do no need to be approved properly.

Banks do not carry any risk anymore to lend out money...since the invention of "mortgage backed securities (MBS)" or collateralized "mortgage obligations (CMOS)" basically all investors (foreign investors) who own their stocks basically carry the risk now.....and banks happily give out mortgages even if people could or should not afford a house....so house prices can go up and up....and they do. It is impossible they will stay at that level forever....

However, house sales have gone down by 35% now in the USA....as houses got too expensive...and renting gets cheaper compared to buying.

"All balloons come down sometime".....the question is when.....once the economy has a recession and more people become unemployed or salaries go down.....the bubble will burst and house prices in the USA will plummet.

thats really interesting, i didnt know that

Its official Vi, you are in every thread on the board!

sshhhhhh... hehehe