Housing Inequality in America

The Economics of it all!

Supply and Demand: The law of supply and demand also affects home and property values. When there is more demand for a certain type of property than there is available supply, prices will increase. Conversely, when there is more supply than demand, prices will decrease. This phenomenon can be quite frustrating for a potential homebuyer. During the spring of 2022 when my family was in the market for a home, we world schedule a walk-thru when a new listing became available and within 24 hours the home was in contract or sold sight unseen. 

Economy: The state of the economy can also affect property values. When the economy is doing well, people are more likely to have money to invest in property. This can lead to an increase in prices.

Interest Rates: Mortgage interest rates can also affect property values. When interest rates are low, people are more likely to buy property. When the Federal Reserve Bank raises interest rates, mortgage interest rates also rise, resulting in fewer home purchases. This chilling effect on the housing market can also result in lower prices. 

Inflation: Inflation is when the prices of goods and services increase over time due to the printing of more money and other factors. This often results in an increase in home and property values. (Mahr, 2022).

To learn more about how real estate can increase, or decrease, in value check out this quick three-minute video.

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