Week-End Review 03/03/2023
I thought that since inflation is on everyone’s mind I would ask the question: How does global inflation affect our housing market in the US of A… Here’s a quick look at a few ways our market can be affected:
- Interest Rates: Higher global inflation can lead to higher interest rates as central banks may raise rates to combat inflation. This can make borrowing money more expensive, including for mortgages. As a result, higher interest rates can lower demand for homes, which may lead to lower home prices.
- Foreign Investment: Global inflation can also impact foreign investment in the US housing market. Investors may look to invest in countries with lower inflation rates to protect their assets from inflationary pressures. If global inflation is high, it may discourage foreign investors from investing in the US housing market, which can lower demand and potentially lead to lower home prices.
- Commodity Prices: Higher global inflation can lead to higher commodity prices, including building materials like lumber and steel. This can increase the cost of building new homes, which may result in higher home prices.
Remember, these are just a few reasons global inflation affects us here at home. There are many other factors that impact us. That said, these 3 reasons are probably the most impactful to our markets.