>If you are just getting out of school and need some house loan etc. won't be bette to have easy access to money? Or do you want 8-10% interest?
Not if everyone has access to easy money, no.
House prices are roughly set by prevailing rents. Take the cost of renting and the cost of ownership and set them to roughly equal. Now, drop interest rates on mortgages a couple percent, what happens to house prices? Monthly payments of mortgages go down, renters and potential landlords see it and try to win bids for houses, driving housing prices back up again.
Much the same thing is, IMO, going on with college prices: since they're largely financed, easier credit leads to higher bids. I'd much rather have college affordable period on a part-time entry-level salary than have interest rate times tuition be affordable on a white-collar salary.
Basically, lower interest rates doesn't particularly help future borrowers. Falling interest rates helps folks who hold assets and can sell them or refinance the debt servicing them.
Not if everyone has access to easy money, no.
House prices are roughly set by prevailing rents. Take the cost of renting and the cost of ownership and set them to roughly equal. Now, drop interest rates on mortgages a couple percent, what happens to house prices? Monthly payments of mortgages go down, renters and potential landlords see it and try to win bids for houses, driving housing prices back up again.
Much the same thing is, IMO, going on with college prices: since they're largely financed, easier credit leads to higher bids. I'd much rather have college affordable period on a part-time entry-level salary than have interest rate times tuition be affordable on a white-collar salary.
Basically, lower interest rates doesn't particularly help future borrowers. Falling interest rates helps folks who hold assets and can sell them or refinance the debt servicing them.