Interest Rates, Inflation and the cost/value of Real Estate
As background, I work in GSE Lending for a Top 5 DUS Shop. Interest Rates have been creeping up and of course rate hikes by the fed, etc. Since January, the 10-Yr Treasury Yield has gone from 2.42% to 2.84% today. Now I understand the basics that as interest rates goes up, the value of real estate goes down (because the cost of borrowing increases).
However, I am wondering if there is a way to forecast what will happen to prices down the road? I know its all relevant to individual markets, etc. But there will be macro trends overall that we might be able to discuss?
How will inflation play on this trend as well? Only reason I ask about inflation is due to inflation's affect upon interest rates and how people claim Gold, Oil and Real Estate as decent hedges to guard against inflation.
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