To maintain a stable real estate market, governments and regulators should prioritize balanced policies that prevent excessive speculation while ensuring affordability. Key measures include adjusting interest rates, enforcing stricter mortgage lending standards, and providing targeted incentives for first-time buyers. These actions help stabilize demand, curb volatility, and promote long-term sustainability.

The stability of the real estate market hinges on aligning supply and demand through data-driven policies. For instance, the Federal Reserve’s 2023 interest rate hikes increased mortgage rates from 3.1% to 7.3%, leading to a 15% drop in U.S. home sales in 2023 (U.S. Census Bureau, 2024). This demonstrates how monetary policy directly impacts market dynamics. Simultaneously, the S&P CoreLogic Case-Shiller Index reported a 1.2% annual decline in home prices in Q3 2023, signaling a cooling trend (S&P Global, 2023). To counteract this, the Federal Housing Finance Agency (FHFA) raised conforming loan limits to $970,850 in 2024, expanding affordability for middle-income buyers (FHFA, 2024). Local governments have also intervened, with 20 cities offering tax abatements in 2024, boosting transaction volumes by 8-12% in Q1 2024 (National Association of Realtors, 2024). Such measures balance market corrections with growth, ensuring stability. Additionally, stricter underwriting criteria reduced loan defaults by 25% in 2023 (Federal Reserve, 2024), proving regulatory frameworks mitigate systemic risks. Collectively, these policies address both immediate volatility and structural inefficiencies, fostering resilience against economic shocks.