Since growing prices are the literal definition of inflation, it seems reasonable to assume properties will follow this general pattern — especially after house prices rose by almost 20% in 2021.
However, things are rarely so clear-cut, and a crash could be brewing instead. Let’s take a closer look at the trends that have been brewing over recent times.
After an initial rush of people trying to secure fixed-rate mortgages when rumors of interest rate increase first loom, it’s likely that demand for buying properties will decline.
Slower mortgage demand makes sense when you consider that the bulk of those in a financial position to purchase homes probably did so at the heat of the pandemic when conditions were favorable for buyers.
Although many Millennials are moving toward homeownership, a large portion remains in the rental market due to the burden of student loans. Along with economic factors, this has resulted in excessive demand.
There are currently two narratives — one focuses on a housing crash coming soon due to interest rate rises, and another on prices increasing in line with inflation.