[roenxi]

I doubt low interest rates help buyers all that much. If there are 3 properties on the market and 4 buyers, it doesn't matter what interest rates are, the 3 highest-earning buyers are going to get the houses and one will miss out. The amount of money borrowed might go up and down, but there is a physical balance equation that must be satisfied which doesn't care about the financial situation.

In theory, low interest rates will reallocate resources from other sectors of the economy to housing, causing more to be built. In practice I don't know how big a factor this is though - I'm used to there being regulatory restrictions that prevent new housing being built in high-demand areas. But that might be an Australia thing. Regardless it'd lag interest rate changes by a few years because it takes time to organise new construction.

[surgical_fire]

Low interest rates don't help the buyer. It helps the seller.

Whatever benefits the buyer would have had are reaped by the seller with a higher price.

[MattPalmer1086]

But most sellers, unless downsizing, will also be paying more for their next house.

[thfuran]

Assuming that prices adjust to keep total payments constant, high interest rates actually help buyers* since the mortgage interest is tax deductible.

*As long as you ignore the value of equity

[bonton89]

You can also pay a house off early much faster if the payment component is more interest than principle.

[pharmakom]

Yeah people are constrained by how much they can pay off each month. Either that’s higher prices with lower interest or lower prices with higher interest.