Let's say that max monthly payment a home buyer wants to make is $1000 per month (let's also not ammortize for 30 yrs in this example) If interest rates are 10% - then the buyer could only afford a house that cost $900 per monthIf interest rates were cut ot 5% the buyer could afford $950 per month As interest rates go down then the home buyer will pay less interest and have more money available to