Will real estate ever be normal again?

Charging 0% interest is absolutely fantastic. The only problem is that we don't do the debt forgiveness. We bail out banks and then expect tax payers to shoulder some or all of the losses. It was especially bad with Germany vs Greece. German banks were bailed out and public healthcare was basically eliminated in Greece.

The only reason why anyone would be against low interest rates is that they noticed that those interest rates eat into economic rents and therefore the owner of money benefited from the economic rents rather than the owner of the monopoly. In that sense, the only difference is that the money goes to the land owner instead of going to the bank. People don't realize that if they buy a $600k house with 0% interest that they would still have to pay $600k at 5% interest except most of the money goes to the bank instead of the seller who only gets $250k (made up number).

Interest rates merely balance the supply and demand of/for labor.

Growth usually happens when there is high demand for labor and that means interest rates are high during periods of growth. When you think about it, interest is just the risk adjusted yield of a labor saving investment plus minus bank fees and profit share of the borrower. That means the existence of high yielding investments is what drives interest rates up as lots of borrowers got to the bank and present their fantastic business ideas and the bank picks the highest yielding ones.

Well, I also have to say something. Growth didn't really stop with lower interest rates. The economy is much bigger than 30 years ago.

Also about negative interest rates, it's a fallacy to think they are supposed to stimulate borrowing. They are supposed to balance people's desire to be in debt with people's desire to hold onto credit (equivalent to demand/supply of labor). That means negative interest rates exist as a disincentive to save money because nobody wants to borrow money.

To the younger generations out there mortgaging themselves into housing: the closer you are to median income, the more you should make damn sure you're computing PITI+Maintenance when crunching your numbers (there are a couple good calculators out there now, discussed in the past on HN), staying below a 33% post-tax DTI, and taking on as much of the fix/replace/improve work yourself as possible.

With increased US income precarity due to the medical debt adverse lottery selection pressure (major source of bankruptcy), conventional housing is a bigger gamble for median income earners, and conservative personal financial planning around housing mortgaging decisions is completely absent from mainstream American discourse. The field is entirely tilted against the common folk, and young generations in particular are specifically preyed upon.

With the high cost basis of housing today, try to avoid transaction churn and look to stay in one property for as long as the numbers make sense to you, and crunch the numbers for any moves to include round-trip realtor fees. At 2-3X gross pre-tax annual income for a house, while moving around and buying each time you move wasn't optimal, carrying the cost for big career income increases was justifiable. At today's ratios, with today's decreased class/income mobility, the round-trip realtor fees to sell-then-buy are tone-deaf by the industry to the reality on the ground for young customers.

The US real estate industry is tremendously out of alignment with serving the majority of the US population and especially the younger cohorts, and their extractive orientation only eats their seed corn to set up an asset bust down the road. The demographic time bomb that is now unfolding even in the US will be challenging to reverse/slow/halt, and has likely already indelibly written the secular asset bust into the real estate industry's future. No doubt the central bank will bail out the private underwriters again by making the quasi-public underwriting facilities take on the overleveraged valuations at their lows and unload as the private balance sheets can pick them up again to profit off them in the up cycle.

The real estate industry in general thrives upon a population who generally cannot get along with each other living in close quarters with each other as individuals, and that is also a hackable vector (among many others). If you can find extremely close (forged over 7-10 years) friends who you can thrive together even when living with each other under the same roof, then you've found a de-leveraging function against the industry's imposed costs instead of going at it yourself.

While all the efforts at YIMBY and related legislation are great, people need to get on with their lives and fund their retirements today. Hack your own solutions at your own level now instead of waiting for those efforts to bear fruit, because for damn sure the politician meat puppets of the real estate industry and the industry itself aren't ever going to do anything for us.

Whatever the Fed is doing is just a side effect of things that happen in the global economy. It has more to go with globalization and China than the US economy.