Regarding a 3.5% mortgage? It sure does sound cheap, but if the property value drops by 5%, the low rate ends up to be a real 8.5%. In other words, the property has to go up by 3.5% a year.
But then again it does not matter if someone needs a house loan and its like a car loan. You pay the interest and accept the falling value of the car.
If houses revert back to a consumer product, that would be another reversal of the past, when houses (instead of gold) used as savings accounts.