Inflation’s Effect on the Housing Market
Inflation is at an all-time high right now and according to The Bureau of Labor Statistics it’s the highest it’s been since the early 1980s. Based on the current economic trend, inflation will continue to rise and it will definitely have a toll on the housing market as well. Let’s discuss the effects of inflation on the housing market.
3 Effects Inflation can Have on the Triangle Housing Market:
Renters: Inflation means the rising of costs and to keep up with rising costs landlords have to increase rent. Inflation affects everyone, not just the landlord which means the cost of rent for your apartment or house could’ve been affordable at one point but due to inflation, it could be out of your means. This definitely can affect renters and could mean downsizing to be able to afford rent.
Decreased Consumer Demand: The rising cost leaves consumers with less money to spend on a big purchase like a house. Also, it can drive consumers out of the market because increased inflation can mean increased home value which can knock a home off your budget. This could affect sellers, as higher prices of homes can not attract as many consumers which could lead to difficulties selling their homes.
Hard to Get a Loan: When inflation rates are high, the federal reserve tends to raise the interest rates. Therefore, the cost of borrowing money can be more expensive because of the high-interest rates. An investor might be hesitant to lend out money during a high inflation period because they recognize the cost of living can be higher and they may not be able to repay the loan.
Yes, inflation rates are high but that doesn’t mean a “no” to your dream home. Here at Raleigh Cary Realty, we can help discuss finance options so you can secure the house of your dreams, Contact us today: https://www.raleighcaryrealty.com/contactus/