Engineering view of Financial housing model and the cause of the BUBBLE explained
Modeling and analysis are always useful to understand the effect of the noise and the influence of the external factors.. As known SP500 index has the best rally since 1974 . One of the reason is low interest rate mortgage which is causing housing market recovery. Well don't forget : Worst bubble for a country is always real estate crash .
Here the analysis for the bubble generation
What happens when a ( saturation limit ) : Number of houses are limited. i.e there is no new construction then model has saturated output fed to the system . Control engineering point of view , wrong output is used as feedback , then system goes unstable . BUBBLE.