This thesis first discusses the theoretical basis of monetary policy's impact on real estate prices, and reviews relevant domestic and foreign literature. Secondly, the panel vector autoregressive model (PVAR) is constructed to analyze the effect of money supply and interest rate of first home loan on China's real estate prices and shock effects through empirical research, and to study the response characteristics of real estate prices to monetary policy. After that, the variance decomposition is used to identify the contribution of each factor to the fluctuation of real estate prices. Finally, it provides suggestions for the sustainable and healthy development of China's real estate, and points out further research directions.