Bill Gosewitz, who is with Ottawa-Carleton Mortgage Inc., explained that the governments use interest rates and the housing market to stimulate or slow the economy.. the lower the rates the more people spend offering huge spinoffs in employment. Interest rates in the late 70's were 11.75%, and the average house was $60K with 5% downpayment, meaning that you needed approximately $28K per annum to carry the home. In 1981, interest rates were 18-21% and the average house was $65K, great for GIC investing, not so good for mortgagors. In 1993 the market peaked, rates were 9.5%, average price for a house $148K, required income to carry the home was $52,800. Then the market dropped in 1993-98 and the average house was $144K We have come full circle from the 1950's when rates were 5%... to today at 5.5%. There are 25-year mortgages again, and there are lenders who will provide us to 85%. Everything is approved based on your credit score even without income confirmation. Housing prices have skyrocketed, hydro is up 25%, roofing and construction costs are up to demand, gas and oil.... Where do we go from here... Make a downpayment for your grandchildren / build a nest egg / pay down your debt, and do it as soon as possible.