While the 30-year fixed mortgage rate might be slowing for the first time in a month, one real estate investor warns the market is still brewing a “perfect storm” for consumers – but especially single and multifamily homebuyers.
“We are seeing a supply-demand imbalance,” Carroll founder and CEO Patrick Carroll said on “Mornings with Maria” Tuesday. “There’s not as much affordable housing for people that want to move to these areas.”
“And now they have a lack of buyers because of mortgage rates,” Carroll continued. “So, again, this has all kind of been a perfect storm for the multifamily business.”
The real estate expert told FOX Business’ Cheryl Casone the company has raised rents up to 30% over the last year and recognized people are not thrilled with the increase.
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“I think one of the important things to point out is our costs are going up,” Carroll explained. “So as our costs go up – our costs of interest, our costs of renovations, our cost of our employees – we need to push those increases along through rent increases.”
Carroll remained unsure of how long the rent raises are sustainable for both the broker and homebuyer.
“It’s been something where we’ve been able to retain, our occupancies are all-time high, so we haven’t seen any slowdown in that yet,” Carroll noted.
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Renting could become a viable, permanent solution for family housing, according to the CEO, who pointed out home builders are trying to keep up with supply chain disruptions that prevent construction and keep supply costs high.
“[Renting] allows flexibility, and it allows people to adjust and be in these areas but not be locked in,” Carroll said. “Home builders can’t keep up and they can’t make the numbers work.”
By the end of 2022, Carroll predicted fixed mortgage rates will only rise.
“I think the Fed’s going to get a little too aggressive on rates and then have to pull back,” the founder and CEO said. “So by the end of the year, though, I think they’ll be higher.”
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