People can afford those absurd home prices. The bigger problem is that the previous owner of the land gets to extract a huge chunk of your labor by simply by owning the land.
Value is still shifting somewhere. Lower rates can force you to borrow more total value to outbid your peers, allowing the bank to extract the same or more value out of you. Same with taxes entering the equation.
I don't reckon any monetary distortions benefit the common people. Society benefits from money being a reflection of labor as much as possible. Everything else is extraction of value.
In Canada at least, primary residences are capital-gains exempt.
Mortgage payments are typically almost constant with respect to interest rates, because the monthly payment is what tends to climb to whatever value the market will bear. Instead, the home value itself goes up and down inversely with rates, such that the monthly payment remains approximately unaffected by a rate cut.
