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Business
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| Number of pages / Number of words: |
2 / 511 |
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If default rates on mortgages go up the companies have to make up the difference. If interest rates were to begin to rise sharply, as has been known to happen, then the default rate would ultimately increase. This would diminish the amount of money that is available to cover mortgages and you would begin to see fewer people in the market for houses...
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This would diminish the amount of money that is available to cover mortgages and you would begin to see fewer people in the market for houses. Fewer people equate to lower demand and ultimately a burst in the housing bubble.
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