WF predicts WSJ Prime will rise to 7% by year end

[J. Mitchell Bernier]

A recent article from Wells Fargo Economists show predict that the WSJ Prime rate will be at 7% by Q4 of 2022. Now as most of you know Prime rate doesn't directly affect 30yr mortgages rates, but 99% of all commercial loans by community banks are priced off Prime. 

Community banks are an integral part in real estate financing as the provide an alternative to the 30yr mortgage by being able to finance cheaper properties, <$75K price points, and finance those with unstable income, self employed or commission based. So with Prime rate practically doubling from 3.25 to 7 in a year, the buying of cheaper/rural area investment properties is going to slow, which means soon after prices should come down. Plus, those without W2 income will struggle to make the math work which means fewer buyers as well. 

Interesting times ahead. What do yall think?