That's why house prices are falling!\n\nHey, dear readers, have you ever wondered why house prices are falling? I know it's probably a big concern for everyone. After all, the house is our place to live! So, let me tell you, it's actually a financial war!
Don't think I'm joking, I'm serious. Let me tell you what a financial war is. To put it simply, it is the competition between major financial institutions. In order to compete for market share, they will take various measures, including lowering loan interest rates, launching various preferential activities, and so on. As a result, buyers will feel that it is a good deal to buy a house now, so they will make a move. But financial institutions are not philanthropists, they do so for a purpose.
Guess what, what is the purpose of financial institutions? Yes, it's about making money! They get interest income by lending money, and home buyers need to repay those loans with their future income. However, if house prices fall, homebuyers will need to take on an additional burden as they will need to use more money to repay the loan. As a result, the income of financial institutions will be affected. Therefore, they will take various measures to reduce the risk of falling house prices.
So, what exactly do financial institutions do? Actually, they have a lot of tools. For example, they control the issuance of loans to avoid excessive bad debts. At the same time, they will also launch various financial products to reduce loan interest rates and down payment ratios, etc. As a result, buyers will feel that buying a home now is more cost-effective, which will further push up the price of the house.
However, house prices are not rising all the time. When house prices rise to a certain level, there is a fall. At this time, financial institutions are exposed to huge risks. Because once the house price falls, the home buyer will not be able to repay the loan on time, leading to the emergence of bad debts. As a result, the income of financial institutions will be affected, and even losses will occur.
Therefore, in order to avoid this situation, financial institutions will take various measures to control the risk of falling housing prices. For example, they will limit the amount of money a buyer can borrow, increase the down payment ratio, and so on. At the same time, they also conduct a rigorous credit assessment on homebuyers to ensure that they can afford to repay their loans on time.
Sometimes, however, these measures do not stop the downward trend in house prices. At this point, financial institutions will take a more aggressive approach to risk. For example, they will take the initiative to sell houses at lower prices, provide more discounts, and so on. As a result, house prices will fall further, but this will also attract more buyers to buy homes.
So, having said that, let's go back to the original question: Why are house prices falling? Actually, there are many reasons why house prices are falling. For example, policy regulation, market supply and demand, economic situation, and so on. However, from a financial point of view, the main reason for the decline in housing prices is the various measures taken by financial institutions to reduce risks.
So, dear readers, you must be more careful when buying a house in the future! Don't be deceived by the rhetoric of those financial institutions! Of course, if you really want to buy a house, don't worry about the price of the house going down all the time. After all, the house is the foundation of our life!