Why Should I Invest in Real Estate Right Now? 

 February 1, 2023

By  Lora Keller

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The most truthful answer I can provide you is, I don’t know. 

For the first time in a long time, the housing market is in a state of confusion. Since the housing bubble and recession of 2008, the housing market has stayed pretty consistent. The interest rates have fluctuated a little over the years but not by much. 

At least not until the interest rates dropped to their lowest in decades in 2020 and 2021. Then in 2022, the interest rates shot up to the highest they have been since 2008. 

And now interest rates are hovering between 6 and 7 percent. But for how long? No one knows what will happen with the market now, but there have been a few different theories floating around. 

Don’t Ask About the Recession

Are we in a recession right now? I told you not to ask. But if you must know…

Technically, No we are not currently in a recession. But somewhat (unofficially), kind of. It’s confusing. The United States is in a lot of debt, and every day we are getting closer to a possible recession. 

The US Government has hit what is called the “Debt Ceiling”. For those who don’t know what that is, the best way to describe the debt ceiling is by comparing it to credit card debt. 

When you first get a credit card you are told what your credit limit is and once you reach your credit limit you won’t be able to borrow any more until you pay what you currently owe first. 

Our government deals with the same thing. Every time we hit the debt ceiling that the government has agreed to Congress needs to discuss and approve a new debt ceiling. 

It’s kind of like if you reached your credit limit on your card and all you need to do is schedule an appointment to talk with someone at the bank who will simply increase your credit limit for you. Continuing to dig yourself into a deeper and deeper hole. 

And the United States has been doing this for years. 

In fact, Congress has raised the debt limit 78 times since 1960. That is 78 times in the last 63 years. 

The Fed continues to raise interest rates to try and account for inflation. But that could end up sending us into a recession. And some people think this is the most likely scenario. So why should you invest in real estate right now?

a watercolor painting of a house in Florida

Should I Invest in Real Estate Before Rates Get Even Higher?

The next possible scenario is that interest rates will continue to climb as long as inflation does. 


Well, inflation is just the increase in the costs of goods, like eggs for example. The price of eggs has gone up dramatically over the last year (in 2022). That’s all because of supply and demand. The average supply of eggs has slowed down. 

Now we don’t have enough eggs to meet the demand. So the only way to slow down consumer sales is to raise prices.

But how does inflation affect interest rates? 

The central bank (a national bank that services commercial banks and the government in that country) will raise interest rates in order to slow down inflation within the economy.  

How does that work? And why? 

Honestly, how inflation and interest rates affect one another is more of an art than a science. 

The idea is when they raise interest rates, the level of inflation will go down. In an attempt to encourage people to continue spending during the pandemic, interest rates on 30-year fixed mortgages dropped significantly. They hit their all-time low when they dropped just below 3% back in 2021.

The low-interest rates were causing inflation to go up. That’s why mortgage listings continued to go up in price over a rather short period of time. The low-interest rates worked better than they could have imagined. 

People continued to spend and buy homes even with asking prices being so high because their interest rates would be locked in at a low percentage saving them money over time.

Now, in an attempt to recorrect the central bank’s initial pandemic overcorrection, interest rates must rise again in order to beat back inflation and get it under control. 

Let’s Hope for Some Stability

The last and quite frankly the example that everyone would prefer is mortgage rate stability. It’s wishful thinking that we will see a change in inflation rates due to the Fed (our central bank) increasing interest rates.

If this happens, we would most likely see 30-year fixed-rate mortgages stabilizing between 7 and 8 percent. At the time of writing this article the current 30-year fixed-rate mortgage is at 6.537% interest rate. 

So, that just leaves the question…

Why Should I Invest in Real Estate Right Now?

Honestly, after looking through all of the different scenarios, there really is no telling quite what might happen. Since the pandemic, everything has been completely different. 

The one thing I can provide you with is to expect the unexpected. 

If nothing else, the pandemic has taught us that there is no way that you can be completely prepared for what might happen in the future. All we can do is our best to make smart financial decisions that we are comfortable with. 

So one person might read this article and decide they would rather wait and see what is going to happen to the real estate market. 

Another person might decide they want to invest now before interest rates get even higher. 

The fact of the matter is that you need to be mentally prepared to invest and make difficult decisions and some investments might not work out. But others will. You must decide what you are most comfortable with if and when you decide to start real estate investing.

Lora Keller


Lora Keller 

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