Maybe. But not certainly. How could we decide?
The first thing to know is prices move in a particular direction for a reason. Inflation is not important in measuring house price expectations. There are few units sold in a year compared to say, shoes. Having a little extra money won’t change the buy versus rent decision much.
Housing is more affected by supply and demand than it is by monetary policy.
Prices follow supply and demand just like everything else.
What are the demand factors?
Look at the demographics:
Look at affordability
Look at supply factors
Look at the ease of building new units
Look at the cost to build
Other supply and demand factors
The housing bubble that collapsed in 2006 to 2008 had very different supply/demand factors.
There are many variables in any decision. Picking one, like “interest rates are rising” and assuming it will be the cause of some event is risky. The factors in any market are never that shallow
Entry-level homes will be fully priced earlier than the others, because of demographics. Look for household formation numbers. Those may vary locally.
Pay attention to “for sale” inventory and time to sell statistics.
Most macro predictions are nonsense because the marketplace is far more complex than the analysis that creates the prediction.
Look for the relative cost to rent versus buy. Not such an easy analysis as you may think. people ignore many cost variables in owning a home.
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I build strategic, fact-based estate and income plans. The plans identify alternate ways to achieve spending and estate distribution goals. In the past, I have been a planner with a large insurance, employee benefits, and investment agency, a partner in a large international public accounting firm, CEO of a software start-up, a partner in an energy management system importer, and briefly in the restaurant business. I have appeared on more than 100 television shows on financial planning have presented to organizations as varied as the Canadian Bar Association, The Ontario Institute of Chartered Accountants, The Ontario Ministry of Agriculture and Food, and Banks – from CIBC to the Business Development Bank.
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