Lower Interest Rates Could Actually Be Bad For Real Estate Markets Right Now

by | Apr 20, 2023 | Forbes

With all the talk about interest rates, inflation, and bank failures these days, we hear a lot of questions about whether it’s a good time to consider buying real estate now or in the next few months. In our CEO Joshua Pollard’s most recent Forbes article, he takes a close look at what’s really behind the current market conditions, why the housing market has perked up recently, and why lower interest rates, which most potential buyers are hoping for, would likely come with a hangover.

Here are a few brief excerpts from the article, as well as a link to the entire piece.

  • Homebuyers and real estate investors that say they really wish interest rates would come down don’t realize the other side of that coin is not very attractive. 
  • If interest rates go down materially in the next few months, it will most likely be because the U.S. economy has fallen into an unattractive recession that materially reduces the demand for real estate.
  • Even after the failure of a number of sizable banks that shook the global financial system, recession and material job losses are the only likely culprits of the Fed changing its current trajectory of raising or keeping interest rates at current levels (outside of another COVID-style pandemic or an uncanny war). 
  • It’s a good time to consider purchases and investments because the risk and the reward feel more balanced than they did before the market took the massive shocks of the pandemic, war, aggressive rate increases, and global bank failures.

Read more here.