What are the prudent strategies as the cost of capital rises? Experts weigh in.
The Federal Reserve’s most recent interest rate increase has made the real estate landscape harder to navigate. The higher capital costs, rising rents and expensive cap rates are impacting both multifamily investment and development in multiple ways. However, rental housing fundamentals have remained strong due to demand still outstripping supply.
One of the effects of rising interest rates is that potential homebuyers get priced out of the housing market, which is supporting rentals demand and keeping investor appetite high.