How increase in interest rates will affect the real estate market in 2022

By: Taro Chellaram /Real Estate Articles/Jul 08, 2022

How increase in interest rates will affect the real estate market in 2022

2022 has proven to be a pivotal year for the housing and real estate market. With the ongoing Ukraine war on one side, and the rising interest rates on the other, the housing market is seeing a shift from the post-Covid boost. There is one good thing that has come out of this though: More options for homebuyers! According to reports, there is an 8% increase in the number of active listings this May, when compared to the numbers this time last year.

 

Experts are predicting mortgage rates to go as up as 5.5% by the end of this year. If met, it would push home rates through the roof, making it a burden for buyers. Sellers, however, are enjoying these record high prices, as their profit rates have not been this high since the past decade. The Chief Economist of the real estate website ‘Realtor’ shared her views on the market conditions stating that, “The number of homes for sale right now is so low that it’s creating these ultracompetitive conditions for buyers, which are so challenging. More homes for sale will help bring back more balance and sanity to the market.”

 

This predicted increase in interest rates is what will be changing the real estate market for the year 2022. This however isn’t a bad thing. Real estate, despite these high prices, has have a very good year thus far. More active properties also mean more options for buyers, who prior to this, couldn’t find the property of their liking due to the shortage of real estate (or rather the shortage of active listings.) What do these rising interest rates mean for investors? It most definitely is going to change their course of action. Lenders and borrowers are going to be more cautious with investments. When talking about real estate specifically, experts suggest that “Cash-flowing multifamily and industrial assets won’t be as severely impacted.” This was quoted from Richard Ortiz, co-founder and managing principal at Hudson Realty Capital. Just because lenders are going to be more conservative, doesn’t mean that investors need to hold off from investing now. The right kind of deal is what makes a world of a difference. The more stabilized the type of property, the easier the deal going through.

 

Until when can you expect these high prices? Well, it’s a complicated matter! A simple, overall answer to that is – supply and demand need to match. Prices will remain high unless there are more homes in the market than people who are willing to purchase them. Prices are set to fall sometime in the future, as there is only so much a person is willing to pay for a home. More home buyers won’t go higher than the current rates for homes.  



Wealth management tips. How to create wealth?

We have listed the best ways through which you can make money in a low risk manner. Create wealth using these investment options. It is the easiest way to get rich.

Late 2022, Early 2023 Market Trends

Real estate investors are keen to invest in real estate. End of year real estate trends and market predictions and trends that can be expected in commercial real estate for 2023.

Where To Find Real Estate Investment Opportunities In The Current Market

Commercial Real estate investors, looking to maximize profits have set their sights on Texas. The Lone Star State has made a name for its self as a strong market for Commercial Real Estate Investors.

What REIT Means And How You Can Make Big Bucks With It!

What if you were told that you could earn regular dividends from your investments without the hassles relating to buying, managing or even financing a property?

Why Invest In Retail Properties?

Are you considering investing in commercial real estate? Not exactly sure which type of property to start with? Fret no more!

2023 Market Predictions in Commercial Real Estate

2023 commercial real estate predictions are here. Find out which is the best investment opportunities are best for you. Make money with commercial real estate.

How is crypto and blockchain changing real estate business and money making?

Cryptocurrency and blockchain technology is changing the real estate business in many ways. Real estate investing has started shifting to a digital and virtual space slowly.

Tesla moves to Texas - Impact on real estate and economy

2021 was a big year for real estate in many ways, but the biggest news of the year came towards the end of it when billionaire magnate, Elon Musk announced his move from California to Texas.

Is Your Investment Property Maximizing It's Returns Potentials

Are you leaving money on the table? When it comes to your investment property you need to be earning maximum returns. After all, you aren\'t in this to give away money, am I right?

Purchasing Commercial Real Estate? Consider These 5 Things Before You Buy

Whether you are a seasoned investor, or you\'re researching for your first property there is always a certain risk factor that makes us hesitate before signing the dotted line.


Instagram

@ tcgcrealestate

Subscribe Now! IT's Free

Stay up to date with all news coming straight in your mailbox.

Copyright © 2023 TC Global Commercial. All rights reserved.