3 Effects a Real Estate Market Crash Would Have on Your Investments
Inflation is soaring, and the Federal Reserve is midway through an entire year of interest rate increases to combat it. The average 30-year mortgage rate is already up over 2% this year, from 3.24% to 5.28%.
When interest rates go up, real estate prices tend to go down. It's a basic reality of supply and demand. When it costs more to borrow money, real estate buyers can't afford to bid up prices as much. Eventually, many buyers are pushed out of the market altogether, and supply overtakes demand, causing prices to fall.
But what does that mean for your portfolio? In the short run, it means pain. But that could all be paper losses if you stay patient and focus on the long run.
Source Fool.com
