"Housing market is in its worst condition ever" Top Economist warns

Learn 50+ Years of Economics in Only 7 Weeks: apply at https://www.stevekeen.com (Bonus: accepted students who join get Ravel — the double-entry, macro visualization tool used in this video.) Why are homes unaffordable from London to Sydney? Steve Keen shows why the standard “supply & demand” story misses the engine underneath modern housing bubbles: bank-originated mortgage credit. Using long-run BIS datasets, Steve tracks how real house prices decoupled from consumer prices after the 1980s as banks ramped mortgage lending. The kicker: it’s not just the level of mortgage debt that drives prices — it’s the change in the change of mortgage debt. That credit pulse explains booms, busts, and today’s squeeze. What you’ll learn • Why real house prices were flat for a century… then went vertical after the 1980s • How bank lending (not “savers’ deposits”) creates new purchasing power for housing • The critical driver: ΔΔ Mortgage Debt → Δ Real House Prices (UK, US, Australia, more) • Why simple correlations mislead — and why differencing reveals the true causal link • How rising inequality and speculative demand amplify bank-fueled price cycles • Policy levers that actually bite: credit guidance, LTV/DTI caps, and curbing mortgage speculation Key takeaways • Housing became a credit-fueled asset: prices outran CPI and wages because banks created the demand. • The credit impulse (change in the change of household debt) best explains house-price swings. • Countries without a visible “crash” can still be in an oversized, fragile credit cycle. • Taming bubbles means steering bank credit toward productive uses — not bidding wars for existing homes. Policy ideas discussed Credit guidance for banks: prioritize business working capital & durable goods; restrict mortgage speculation. Macroprudential limits: tighten LTV/DTI during upswings; countercyclical buffers that lean against credit booms. Re-align incentives: discourage flipping/empty-home speculation; reward new supply without turbo-charging land prices. Measure what matters: track private-debt ratios and the credit impulse alongside CPI/unemployment. ------ About Steve Keen Steve Keen builds accounting-consistent, data-driven models of money, debt, and instability. Creator of Minsky and Ravel, he replaces classroom myths with the operational mechanics you can simulate and test. Learn 50+ Years of Economics in Only 7 Weeks: apply at https://www.stevekeen.com (Bonus: accepted students who join get Ravel — the double-entry, macro visualization tool used in this video.) • Weekly live Q&A access • Cohort of rigorous learners • Ravel included for accepted students who join Support reality-based economics • Subscribe for more Ravel walk-throughs and housing myth-busting • Like if this reframed housing beyond “just build more” takes • Share with anyone who thinks deposits fund mortgages #housingcrisis #houseprices #mortgagedebt #CreditImpulse #PrivateDebt #BIS #Ravel #Macroeconomics #FinancialStability #Inequality #UKHousing #australiahousing #ushousingmarket #SteveKeen