What Fed Rate Hikes Could Mean For Real Estate Investors to End the Year

As Al Pacino famously said in The Godfather III, “Just when I thought I was out, they pull me back in!” Just when you thought you’d seen the end of high interest rates and that the Federal Reserve’s hand-picked new chair, Kevin Warsh, had a clear mandate to lower them, news of the Fed’s quarter-percentage-point rate hike has all of us investors shuttling back to 2022 in a nightmarish fever dream of negative cash flow. Will it never end? A quick recap: Amid rising inflation sparked principally by the Iran war, the Federal Reserve raised interest rates for the first time in three years after its September meeting. For many investors, that will only add insult to injury because, at the time of writing, mortgage rates have already moved above 7%, so another rate hike will only add fuel to the fire. However, for small investors looking to grow their portfolio, the obvious silver lining is that higher interest rates could lead to falling prices. For those with capital, the chance to nab a deal amid low competition and high rental demand is a golden opportunity. Before we get ahead of ourselves, remember that the Fed does not directly set mortgage rates, which are more closely tied to lon...