Inflation, the Fed, and Your Rentals: What You Need to Know

[Selina Gray]

Wednesday’s November CPI report gave us a peek at inflation, and it’s not terrible. Headline inflation ticked up from 2.6% to 2.7%, while core inflation—the one that ignores things like your weekly gas price mood swings—stayed steady at 3.3% for the third month in a row. In other words, nothing shocking.

Here’s the kicker: Despite inflation still being above the Fed’s happy zone, the markets are basically guaranteeing (99.9% certainty, folks!) that the Fed will cut interest rates this month. That’s a big deal for those of us in real estate. Lower rates could nudge buyers off the fence, potentially impact cap rates, and make refinancing a little less heartburn-inducing.

What does this mean for you? If you’re holding rental properties, keep an eye on demand for housing. If rates drop, we might see more first-time buyers, which could loosen up the rental market. But for now, stay calm and collect rent—market conditions still favor landlords.

Let’s keep the conversation going. What’s your take? Planning to hold, sell, or maybe snag a new property while rates are flirting with lower numbers? Hit reply and let me know!