chapter  1
14 Pages

Housing is not finance

Housing markets depend on long-term borrowing. This borrowing comes from banks and mortgage lenders who are players in international financial markets. They borrow and lend across borders and often use our mortgage debt as a form of security for their borrowing. In other words, they use our debt to create more debt. And so the housing decisions we take in Detroit, Los Angeles, Derby or Lincoln link us to Frankfurt, Tokyo, Wall Street and the City of London. Many people, it now appears, have a stake in our little homestead.