Commentary
Real estate increasingly will face two contrary forces. On the one hand, buying will suffer as rising mortgage rates render home ownership less affordable. On the other hand, ongoing concerns about inflation will drive buyers into real estate, for history shows that it provides inflation protection for their wealth, especially in the face of falling stock and bond prices.
The balance of these forces will likely drive buyers to make purchases but at a lower point on a likely rising price distribution than they would otherwise prefer.
Some of these developing effects are already evident in the available statistics. The Commerce Department reports that while mortgage rates remained low last year, buying surged. In just four months between August and December 2021, the pace of homebuying jumped 22 percent….