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5 Reasons Why Rising Inflation Is Stoking a Housing Market Crash

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One of the significant consequences of rising inflation is the potential for housing prices to rise, possibly causing a housing market crisis.

Since growing prices are the literal definition of inflation, it seems reasonable to assume properties will follow this general pattern — especially after housing market prices rose by almost 20%.

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However, things are rarely so clear-cut, and a crash could be brewing instead. Let’s take a closer look at the trends that have been brewing over recent times.

1) Interest Rates Hikes

The association between interest rates and inflation is well known. When inflation runs wild, the Fed raises interest rates to slow the economy down.

2) Slowdown in Demand

High numbers of homebuyers scrambling over the same limited housing stock. 

3) More Home Construction

Many experts predict that housing inventory will enter the market, allowing supply to meet demand.

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