What Mrs. Kelly doesn’t see, is that the traditional 20% down payment to secure a loan for an underlying asset that is still likely to drop 10-20% going forward, is not the same security as 20% down in a normal market. Banks would need 30-40% down to not be insane to lend money in this environment. They can’t continue to lend money at high risk just to provide liquidity in the market. When real estate prices have corrected, they’ll lend money again to qualified buyers.
There’s also going to be less demand than historical averages for homes in the next 3-5 years because much of the future buying pool was prompted to buy when rates were at 1%. Like remodeling after an earthquake. You get a surge right after the event, but that surge is coming from future demand as those who would have remodeled in the next few years are forced to do it now. That means real estate prices should actually over correct to below historical trends…and we are still much higher than historical norms at present.