Leverage was one of the things that contributed to the 1929 stock market collapse. Stocks were going up so fast that brokers were offering 100% margin (leverage) on stocks, which made them go up fast… Same in real estate, if they accept little or no down payment, and have low interest rates, “values” are going to go up fast, people will be “rich” and will buy more real estate at higher prices.
Real estate “values” are highly sensitive to lending rules, such as credit scores (our 2009 collapse was due to lending to people without sufficient credit or income), income requirements, down payment requirements, and interest rates.
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