The old Chinese saying ” may you live in interesting times ” applies to our current housing market. We have experienced double-digit price increases in home values in recent years. A mad rush to buy homes during the pandemic, combined with the homes being in short supply and near-zero interest rates for mortgages, inflated house prices by over 40%, shutting out many first-time buyers during the last couple of years.
U.S. Federal Reserve has hiked the interest rates by a cumulative 255 basis points since March, and more are expected over the coming months, essentially guaranteeing a slowdown in the housing market which is highly sensitive to the cost of borrowing.
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