This thesis analyzes the relationship between the policy interest rate and housing prices in Stockholm, Gothenburg, and Malmö during the period 2006–2023. Using a log-linear panel data model, the study examines square meter prices for condominiums and purchase prices for villas. The model includes the policy rate, lagged policy rate, disposable income, unemployment, regional GDP per capita, consumer price index (CPI), and dummy variables for geographical differences.The results show that all variables in the model are statistically significant in explaining housing prices. This indicates that both macroeconomic factors and regional differences play an important role in the development of the housing market during the studied period.The study supports the theory of the monetary transmission mechanism and emphasizes the importance of the interest rate and other key indicators as tools for understanding price developments in the Swedish housing market.