Home Buyers

Tag: interest rates

Real Estate Investment Down By Nearly Half Since 2022

According to a report by Business Insider, real estate investors have been leaving the market at an almost record pace over the course of the past year. The total number of home purchases by real estate investors fell by 48.6% between the first quarter of 2022 and the same time period in 2023. This unusual exodus of real estate investment has been blamed on high interest rates, declining rents, and falling home prices, which has eaten into their profitability.

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Fed Signals End to Rate Hikes, Invigorating the Market

The Chairman of the Federal Reserve, Jerome Powell, has signaled a potential end to a series of rate hikes, after once again raising the interest rate by .25%. As a result, the real estate market was invigorated, with mortgage demand increasing by 5% over the course of a week. However, people remain cautiously optimistic, as future rate hikes may be necessary to further slow inflation.

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Home Purchases Slow As Interest Rates Increase Above Seven Percent

The number of people who are looking to purchase new homes has dropped, as mortgage interest rates have gone over seven percent for the first time in nine years. This increase in interest rates has also left some lenders worried that more borrowers may begin to default on their mortgages, thanks to a cooling economy. Despite these concerns, however, mortgage defaults are only increasing gradually, although some fear that increasing interest rates could have a negative impact on borrowers as time goes on.

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Rising Interest Rates Could Lead to Chilling Market

Although home prices have reached some of the highest levels on record, some economists warn that rising interest rates could stop this trend soon. With more inventory entering the market, forecasters are predicting the real estate market is beginning to cool. Higher interest rates could accelerate this process by making it more expensive for prospective buyers to get mortgages, limiting demand.

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