Lenders enabled the housing bubble, but people needed a reason to provide the demand to pay stupid prices to inflate a housing bubble. As I documented, the Desire for Mortgage Equity Withdrawal Inflated the Housing Bubble. In order for home price appreciation to motivate people to pay stupid prices and inflate housing bubbles, they need a way to access this appreciation. The more immediate and plentiful this access to money, the more motivated buyers are to borrow and cash out. Mortgage equity withdrawal is the doorway to appreciation; it makes houses very desirable and very valuable. Texas shows the way To test this premise, we need to find a market with limited access to mortgage equity withdrawal and compare the home prices there to…[READ MORE]