The real estate market theoretically should see increased demand and prices if mortgage rates drop, but historically, prices have often plummeted (e.g., 2008, 2020) immediately after rate cuts, though a recovery typically follows within 3-24 months. The speaker notes that the outcome depends on other factors like unemployment and the 'law of diminishing returns'.
"if mortgage rates come down in theory real estate market would get get demand but if the reason for increasing demand kind of has other potential unknown drawbacks or known drawbacks then that could affect the real estate market differently or if unemployment climbs rapidly that would also be able to slow it down so we don't know yet but in theory it should go up but there is a I guess what's the best way to put it the law of diminishing returns at some point it's not it's not that home running of of just cuz like if they start lowering rates a lot I won't like here let me give you a good example in the it still took about a year lowkey to recover it literally took about a year to get back but last time they cut rates real estate prices plummeted in 2020 and then again in in '08 so like in the there is a period from like 3 months to 12 months maybe even 24 months but you usually when rates are cut and rates are lowered real estate hasn't necessarily performed good but then it usually bounces back in like again depending on the time frame"
