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Real estate investors have steered a great deal of headgear over the last two years. High interest rates have less transactionsAnd those same rates encourage homeowners to stay in their homes. That creates fewer opportunities for people who want to sell property, and a real estate investor Cardone grant Recently sounds the alarm.
Not only do high interest rates make real estate less accessible, but they also make all other types of debt more expensive. High rates of the Federal Fund lead to higher interest payments on credit cards, car loans, personal loans, credit lines, and other financial products.
“It's a national crisis,” Cardone said when talking about high interest rates.
This is why the real estate market has not been looking good and what it means for investors.
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Cardone mentioned that mortgage rates are sitting at 8% and depressed people from buying homes. High interest rates make the monthly mortgage payments more expensive. Although high rates can prevent red-hot inflation, the inflation rate has been still steady for several months.
Higher interest rates made more sense in 2022, but they don't make so much sense now. The fed anticipates two rate fractures This year that would reduce the total rate of 0.50%.
Reducing rates can boost demand for mortgages and potentially build house prices as a result. Many investors will be watched carefully about the Mid -July Fed decision on interest rates. Any rate cuts can create attractive purchasing opportunities.
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Transactions fire the real estate industry. Real estate agents must close property deals to receive commissions, lenders need deals to receive interest payments, and investors have to make deals to expand their businesses.
When the deals stop, the whole industry is suffering, and people are looking for new opportunities. Cardone believes that the last two years have been some of the most difficult years for the industries as people tackle high interest rates and low demand.