Inflation may have just peaked. And with it, mortgage rates could come crashing down sooner than economists expect. But what would cause a scenario like this, especially as the Federal Reserve continues to bombard Americans with higher and higher interest rates? And, with supply chain shortages abound, how do we know that inflation won’t boomerang back in 2023, creating an even worse problem than before? Stick around. Dave has the answers.
For the past year, Americans have dealt with high inflation rates and the crushing weight of purchasing power declining. Food, energy, electronics, and most importantly, housing, have skyrocketed in price. To tame this economic beast, the Fed unleashed a series of almost unimaginable rate hikes, slowing down homebuying, borrowing, and business building in the process. This was part of the plan, and we’re just now seeing the effects of these high rates on inflation.
But what will happen once inflation numbers start to cool? Will the Fed suddenly lower interest rates and turn the housing market tap back on again? Will droves of homebuyers get back into the market, causing the same amount of competition that high rates were supposed to solve? Assemble your post-thanksgiving sandwich, plug in, and get ready for some up-to-date data drops from Dave Meyer.
Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.