Explain how lower lending standards and lower interest rates can lead to higher house prices.

Lower lending standards and lower interest rates can lead to higher house prices as they both make it easier and cheaper for people to borrow money to buy a home. When lending standards are lowered, it means that more people can qualify for a mortgage and obtain funding to purchase a house. This means that the demand for housing increases, which pushes up the price of homes. Similarly, when interest rates are lower, it means that borrowers can pay less money in interest over the life of their mortgage, which makes housing more affordable and encourages more people to buy. The increased demand created by these factors can lead to a situation where there are more buyers than available homes, which further drives up the price of houses. In summary, lower lending standards and lower interest rates can lead to higher home prices through increased demand for housing and lower borrowing costs.