With rising interest rates, what will happen to our real estate markets? Rising interest rates will slow our market. A slower market is not necessarily a bad thing. Yes, the cost of lending goes up, but our unrealistic price appreciation will slow down. This will begin to bring our economy which has been running wild, to a slow. This means an inherent slow in-home purchasing, which will drive up rental demand. Across the nation large institutions have bene buying Build-for-Rent (BFR) communities in troves. These are large luxurious home developments, but instead of selling the homes they rent them out. This is a great hedge for banks because rising interest rates on their loans mean rental demand will increase for their BFR holdings. This example goes to show how great of a hedge against inflation real estate can be. Does your investment portfolio contain real estate?
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