But at least the bubble popping would make it easier for the middle class newcommers enter the market.

Just inflating the bubble further, as every European bank and government is doing, to make existing property owners richer on paper and get their votes, is not a viable long term solution.

IMHO, it can't pop sooner. Houses should be for living, not for speculation and hoarding wealth. The younger generations have been screwed enough by the old established wealth hoarders.

I was around during 2008, that's exactly the opposite of what will happen. Financing will dry up and the newcomers will find themselves in a highly competitive rental environment with inflated prices, while the banks and wealthy snap up SFH's for pennies on the dollar.

Maybe the government can raise rates and offer some kind of refund to people who bought their first house in the last year?

Otherwise, the number of people in that "put their life savings as a downpayment on an overpriced house" category is only going to grow, making the problem worse when the collapse eventually happens.

>offer some kind of refund to people who bought their first house in the last year

I think we run into real problems in America trying to protect people from the consequences of their own bad decision making. In addition to being deeply patronising, it eliminates so many of the normal incentives to be responsible and pushes up risk appetite across the board.

If individuals make poor investments (whether on a house or gamestop otm call options) they'll learn their lesson and move on. There's enough of a safety net in America to ensure no one truly goes hungry from bad luck (and before you point to homelessness- that's a complicated issue intertwined with drug addiction, mental illness and in some cases a free lifestyle choice)

I agree, but at the moment, it seems that same desire to protect them results in preferring a policy that drives prices ever upward. This would be a less destructive compromise.