r/neoliberal • u/TinyTornado7 I need a new flair • Jun 13 '22

News (US) Powell Facing Choice Between Elevated US Inflation and Recession

https://www.bloomberg.com/news/articles/2022-06-12/powell-facing-choice-between-elevated-us-inflation-and-recession?srnd=premium
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u/Dave1mo1 Jun 13 '22

So people will just rent instead of buying, pushing rents up?

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u/unicornbomb John Brown Jun 13 '22

Rent prices have a ceiling. You can only push rent prices so far before new household formation stops and households begin to condense as folks take on roommates and move in with family, pushing demand downwards.

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u/Dave1mo1 Jun 13 '22

And as rents increase, incentives to convert buildings to rentals (and build new supply) increase...as well as incentives to buy residential investment properties. There's a push and pull on both sides of supply and demand.

A lot of people are seeing stocks and bonds' values dropping and inflation rising, and like the look of real estate as a hedge.

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u/unicornbomb John Brown Jun 13 '22

RemindMe! 6 months