FOMO house buyers will feel the interest rate hikes

6 ก.พ. 2022

As we all know from econ 101, house prices increase as interest rates are lowered. This can be seen with house prices increasing upwards of 25% after effective federal funds rates were dropped to 0-0.25%. Due to people FOMOing into the housing market and forgoing any and all inspections, the housing market was once again fueled by irrationality and became a bubble. The Fed plans to raise rates 3-4 times this year and the lumbar shortages have finally been mitigated. New housing starts have increased along with the rates increase as such home prices will further decrease.