Personal Finance and Investing

To spend on cars, houses, vacations (though mortgages are influenced by some other factors, too), etc. Businesses also have to reel in spending. So, there is less demand. If supply stays constant, or increases, prices will go down because suppliers want to attract customers, to sell their stuff.

For example, I saw a real estate newsletter that said someone who had to borrow and could afford a million dollar house earlier this year now can afford only $800000. So, that should slow the increase in housing prices and maybe cause a drop.