In the latest episode of Macro Markets, Cointelegraph analyst Marcel Pechman delves into the real estate market and discusses how rising interest rates have led to stagnant mortgage demand. With the average 30-year fixed-rate mortgage interest rate at 7.27%, both refinancing and home purchase applications have seen a significant decline.
However, Pechman speculates that despite the current circumstances, house prices might still rise if inflation continues to grow. He emphasizes that historically, real estate, especially in urban residential areas, has proven to be a reliable store of value. This suggests that even though some sellers may be distressed, investing in real estate could still be a viable option.
Pechman also draws attention to the fact that other investment options may not provide a safer haven in the current economic climate. This further strengthens the case for considering real estate as an investment, despite the challenges it currently faces.
Moving on to another topic, Pechman discusses the initial public offering (IPO) of Instacart, a popular grocery delivery service. The company’s valuation was established at approximately $10 billion, significantly lower than its previous peak valuation of $39 billion. This decline in valuation reflects the challenges faced by venture capitalists in the current economic climate.
Pechman introduces an interesting perspective, suggesting that there should be a shift in investor metrics, with a focus on the need for a reliable store of value. This is where cryptocurrencies like Bitcoin (BTC) could potentially play a role. Pechman highlights that not all cryptocurrencies seek growth through user bases and fees. Bitcoin, for instance, can serve as a transparent reserve system for banks and nations, issuing Bitcoin-backed digital assets without requiring a billion users. This shift in perspective highlights the importance of having a reliable store of value, and cryptocurrencies can fulfill this role, unlike precious metals which often come with auditing challenges.
In conclusion, the latest episode of Macro Markets provides valuable insights into the real estate market and the challenges it currently faces due to rising interest rates. While stagnant mortgage demand may be a cause for concern, it is suggested that real estate, particularly in urban areas, can still be a reliable store of value. The episode also explores the role of cryptocurrencies like Bitcoin in providing a safe investment option in the current economic climate, with a focus on their ability to act as a transparent reserve system. To delve further into this analysis, be sure to check out the full episode on the Cointelegraph YouTube channel.