Q: Interest rates keep going up. When do you think rates will go back down? Bill, Kenilworth, NJ A: Many Fed watchers expect the Fed to lower interest rates in mid 2023 under the assumption that inflation falls back to the Fed’s 2% target. The direction interest rates will move depends on 2 things: 1) how persistent inflation is over the next 6-9 months and 2) if we are in a full blown recession by mid 2023. If inflation is lower, rates are likely to go down and if we are in a full blown recession in mid 2023, the Fed will likely lower rates. Thanks for your question, Bill. For more real estate tips and information visit my blog […]
continue reading Q: A lot of people are predicting a recession. If it happens, how will a recession affect real estate home prices? Stuart, Kenilworth, NJ A: Home prices have remained steady or risen during the majority of the last few recessions in the US. High mortgage rates can deter people from buying, but as the recessions of the ’80s and ’90s showed, when mortgage rates rose to almost 20%, high rates don’t mean demand or home prices will fall. What really determines how the real estate market is affected by recession is the impact it has on housing demand and home affordability. Nationally, today’s median income is around 30% of the median home price. In 1980, that number was almost 45%. […]
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