I know real estate isn’t a popular topic round here but I’ve been thinking about the Fed’s proposed rate cuts in 2024 and how it’ll affect US real estate.

Supply is extremely constrained right now bc most home “owners” bought or refied at historically low rates (2.65-3%) so it makes absolutely no sense for them to sell and have to re-enter the market at 7-8%.

There are still buyers at current rates however, substantially fewer than when rates were half their current cost.

If the Fed lowers rates even by 750 bps in 2024 I predict it will flush a lot of people out of their cash holdings in money market funds (≈6 trillion) and into real estate. Normies want houses and are just waiting for rates to drop a little to pile in. They’re antsy and think this is the move - boomer rational.

Rates falling by .75% will NOT be enough to make holders of cheap mortgages sell though. Not even close.

I predict there will be substantial additional buy pressure in real estate as rates fall slightly with no increase in sell pressure.

I predict a squeeze in real estate in 2024-2025. Prices in major markets are going to be bid up massively. Probably close to their ATH’s in short order.

That’s my thesis. Thank you for coming to my ted talk. I will remain humble and stack sats. But I’m building houses too 😂