With falling prices of houses, rental prices will also fall, making the entire real estate business unappealing. That would have the effect of reducing building

With falling prices of houses, rental prices will also fall, making the entire real estate business unappealing. That would have the effect of reducing building material cost significantly, if there's no demand. Builders and developers get paid for their other contributions to the process though, so while their revenue will decline, so will their costs, which will keep things stable enough. The ones fucked will be corporate investors who buy from developers to rent them out to individuals (and to some extent those developers who rely on inflated house prices).