Abstract:n this article, the author studies the impact of loan interest rate, and deposit/loan interest rate spread on the house price. The study shows that the house price boom can be attributed to two factors: the persistent drop of the loan interest rate, and rise of the deposit/loan interest rate spread from 1998, because both will cause the boom of the real estate credit. And the author finds that the deposit/loan interest rate spread has much larger influence on the house price than the loan interest rate. In addition, the author finds the great inertia in the dynamics of the house price. According to this result, the author proposes two prescriptions for the soar of house price: heighten the loan interest rate and reduce the deposit/loan interest rate spread; hold on the stiff housing policy so as to undermine the ever-growing expectation of house price.