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Hey BP members,
I'm confused about a topic and I'm hoping someone could help me and possibly others understand. I have a couple questions:
I know that when inflation increases it causes home prices to increase as well.
I also know that when inflation increases, the fed has to increase interest rates to combat that inflation which causes home prices to fall.
So my question is, in our environment now where inflation is increasing as well as interest rates (soon), will home prices continue to increase or fall over the next couple years? Inflation is still going up, so that should make home prices go up. Rates are also going up which should make home prices fall.
Given that there's such low supply on the market right now is it possible that rate hikes won't affect housing prices?
How high could mortgage rates potentially go? 2% more, 5% more, 10% more? Over the next decade or so.
Could rates rise 1-2% before fixing the inflation issue and come back down? Or could they continue to rise such as back in the 1970s? Is it even possible to know for sure?
Thanks for any thoughts and ideas.