Inflation and Its Impact on Home Prices

It’s no secret that inflation has a powerful impact on the housing market. When inflation occurs, however, what exactly happens to housing prices? Inflation is notorious for worsening the demand-supply imbalance in the housing industry, leading to even higher prices. Homebuyers will attempt to hedge against inflation by purchasing a long-lived asset like a home. When more people start entering the housing market, the demand only increases further, and the supply becomes more limited. Ultimately, this leads to prices soaring. With home prices already at record highs, this can be particularly damaging. For more information on the United States housing market and the impact of inflation, get in touch with us today.