Us inflation rate is 6.8% for the year.
Fed funds base is at the zero bound.
Real rate -6.8%
Say we were at .5% base with the same 6.8% IR,
That would put us at -6.3%
So if inflation falls into the 4s next year... totally plausible.. and the FED lifts off and commits to 3 hike...75bps.
We're still looking at -3% into next year or worse.
Ie...homes will go up still...just at a slower pace.
Fed funds base is at the zero bound.
Real rate -6.8%
Say we were at .5% base with the same 6.8% IR,
That would put us at -6.3%
So if inflation falls into the 4s next year... totally plausible.. and the FED lifts off and commits to 3 hike...75bps.
We're still looking at -3% into next year or worse.
Ie...homes will go up still...just at a slower pace.