Which of the following contributed to the soaring housing prices during 2002-2005?
A) the Fed's low-interest rate policy
B) regulations that reduced the required down payment and other lending standards for home mortgages
C) the increased leverage lending by Fannie Mae, Freddie Mac, and large investment banks
D) all of the above

Question

Quizplus · Accepted Answer

All three factors contributed to the soaring housing prices during 2002-2005. The Fed's low-interest rate policy made borrowing cheaper and encouraged people to take out mortgages, regulations reduced the required down payment and other lending standards, making it easier for people to qualify for mortgages, and increased leverage lending by Fannie Mae, Freddie Mac, and large investment banks increased the amount of capital available for mortgage lending, further fueling the housing market.

Which of the Following Contributed to the Soaring Housing Prices