The decrease in mortgage rates can stimulate housing demand. As rates fall, the cost of purchasing a home decreases correspondingly, which may attract more buyers to enter the market.

Especially for those buyers who were hesitant due to high-interest rates, lower rates may spark their interest in homeownership.

Low interest rates typically stimulate home sales and transaction activity. Homebuyers may be more willing to purchase properties because they can obtain larger loan amounts at lower rates, while also enduring less repayment pressure. This may lead to a rapid turnover of properties in the market, promoting overall activity in the real estate market.

However, it is worth noting that while low interest rates may stimulate housing demand and transaction activity, they may also impact housing prices.

Low-interest rates may contribute to rising property prices, as buyers can afford higher prices, potentially exacerbating the supply-demand imbalance in the real estate market. As mentioned in this article, the median housing prices have been consistently rising, indicating that low-interest rates have not significantly constrained housing prices.

Additionally, low-interest rates may affect real estate investments. Investors may be more inclined to invest in the real estate market as they can access funds at lower costs to purchase more properties or engage in other investment activities. This may intensify speculative behavior in the market, affecting housing prices and market stability.

The real estate market in a low-interest-rate environment also needs to be vigilant against potential bubble risks. Low-interest rates may lead to excessive speculation and overheating in the market, eventually resulting in the formation of a real estate bubble. Once interest rates rise or other economic factors change, this bubble may burst, having negative implications for the entire economic system and financial markets.