It’s a worry to many different people for various reasons — from individuals who are worried they won’t be able to afford their groceries after price hikes to business owners concerned about covering their overhead costs.
However, one of the significant consequences of rising inflation is the potential for housing prices to rise, possibly causing a housing market crisis.
How? Higher interest rates make it more profitable to save and more expensive to borrow, encouraging people to refrain from spending too much — reducing demand and therefore getting inflation under control.
The same phenomenon played out in many different real estate markets across the world in 2021: High numbers of homebuyers scrambling over the same limited housing stock.