Jerome Powell just caused the 2022 Housing Market Crash to get worse. Real Estate Investors are now getting ready to firesale their properties.
Jerome Powell announced today that the Federal Reserve will continue to fight Inflation with interest rate hikes throughout the end of 2022. And that they will keep interest rates at an elevated level in 2023.
This is BAD NEWS for Real Estate Investors. It means that Real Estate will not be as profitable relative to buying US Government Bonds, suggesting investors will buy fewer homes in the future. It also means some Investors will likely be forced to sell their Homes through Margin Calls.
The Markets that are most exposed to this Fed Firesale, and where home prices will drop the most, are ones like Phoenix, Las Vegas, Atlanta, and Dallas - with the lowest cap rates and highest share of investor demand.
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