Quote:
Originally Posted by BrownTown
Rates are rising because the Federal Reserve bank is raising them due to there being no slack in the labor market and the desire to contain inflation. Again, this is basic Economics and the the Federal Reserve is trying specifically to stop projects like the ones in NYC from going forward to avoid real estate bubbles created by cheap money.
|
Rates certainly impact construction to some degree, even in Manhattan where demand is strong. But economists have considered the New York market with its very strong demand and the relatively modest and gradual interest rate increases that have happened and are planned by the Fed. And have not projected any dramatic slowdown in construction.
Also, there are countervailing aspects to increases.Higher rates can also attract more foreign investors in all types of assets, including real estate. It's happened before.