10
8
6
4
2
0
2018
2019
2020
2021
2022
Tradingeconomics.com | U.S. Bureau of Labor Statistics
https://bit.ly/3dvLdwD
rates climb higher than 8%. So, you might logically conclude rates will only go up from here—at least in the medium term. As you’ve already learned, rising rates can be both good and bad for the multifamily real estate investor. TREND #3: THE RISING BARRIER TO HOMEOWNERSHIP You’re probably aware that house prices are dropping in many areas of the country. But let’s take a closer look at some data supplied by the National Association of Realtors. You can see from the chart below, that house prices are still up
The question you may ask is whether interest rates will continue to rise. No one has a crystal ball, but you can probably bet the answer is “yes.” After all … TREND #2: INFLATION IS RUNNING HOT Inflation is north of 8%. As you might know, Paul Volcker, the chairman of the Federal Reserve, had to drastically raise rates the last time it was running this high. In fact, he had to raise rates higher than inflation to tame it. If this holds true today, we’ll get inflation under control only if interest
considerably compared to a year ago.
In fact, the average house is up roughly $50,000 versus last year. Now, $50,000 might not sound like a lot to you, but when you combine that increase with rising rates, the difference is stark. The median-priced house purchased a year ago for $360,000 at 3% interest would have cost the homeowner around $1,517 a month. Meanwhile, today’s median-priced house would run $420,000, and at today’s prevailing rate of 5.75%, it would cost $2,451 a month. That’s an increase of over $900 a month—a massive increase at
420,000
400,000
380,000
360,000
340,000
JUL 2021
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APR 2022
Tradingeconomics.com | National Association of Realtors
https://tradingeconomics.com/united-states/single-family-home-prices
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