The stock market is down, inflation is high, cost-of-living is greater than ever while low unemployment statistics continue to break records. The Federal Reserve has begun a series of interest increases, the effect of which is yet to be seen. The housing market has gone ballistic; in some instances, properties have increased 26%, according to The Economist magazine.

For a decade, mortgage interest rates have stayed low, making loan payments more affordable for the home buyer and the real estate investor as well. After the housing bubble burst in 2008, lenders are more cautious in their loans, requiring 20% down on most purchases, with creative financing, including the interest-only loan, a forgotten option.

While the market remains strong nationwide, with supply and demand fueling it, there are still cities where houses are available and costs are reasonable. If money tightens, as the Fed hopes it will, those areas may expand. The Economist predicts that if interest rates on 30-year notes reach 4%, house prices will fall; the magazine was hopeful that a repeat of 2008 will not result.

Rent has gone up in most communities, which doesn’t bode well with the increased cost of groceries, gas and the ever-looming medical bill. Investment loans are traditionally variable rate, with increases possible every 2 years up to the 15-year amortization benchmark commercial loan.

Higher cost and shortage of labor, a spike in building material prices, and greater interest will lead to more renters and fewer people who live the American Dream of owning their home.