The impact of increasing interest rates on the housing market.

 

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Most people assume what goes up must come down, but how much will prices come down and will they crash? The main cause of prices cooling off right now is higher interest rates, which has reduced buyer demand. However, most experts say these rates will come down some once inflation comes down sometime in the next year or so. Once rates become more reasonable, demand will normalize.

 

Plus, there are now institutional buyers waiting to buy properties at a discount. Now, on the supply side, in most growth markets, there simply aren't enough single-family homes to meet the needs of the people. This is because there haven't been enough single-family homes built to keep up with household formation over the last decade. So in the end, based on real data, it looks like most home prices will cool off by around 10% or so.

 

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