[drfxyjhdyfrhgc]

>These two sentences cannot simultaneously use the same meanings of the words "supply" and "demand".

The second sentence is technically incorrect. During a bull market, demand is increasing relative to supply. (If supply was decreasing relative to demand, prices would increase, but that would not be a bull market)

>What is the maximum loan?

The GP comment I credited described the "maximum amount of loan" as a function of buyer income and interest rate. Obviously, the house is sold to the highest bidder.

In a hot market, the average price of real estate will approach the largest mortgage available to the average winning bidder (plus some quantity of household wealth).

[thaumasiotes]

> The GP comment I credited described the "maximum amount of loan" as a function of buyer income and interest rate.

But the price of the house is set without reference to buyer income or interest rate. It therefore cannot depend on "the maximum amount of loan", which is an incoherent concept anyway.

The government program juices demand by making financing more available than otherwise. This raises the price of homes. But that's the limit of what we can say.