Interest rates affect the affordability of houses and businesses. if interest rates go up, the business needs to make more to be able to pay the interest on the loan.
While economic volatility headlines news as the Federal Reserve is expected to increase rates by at least 125 basis points before the year end, some signs of relief exist. In fact, according to a CoStar report, multifamily rent growth has begun cooling across the country. This is a critical trend as housing makes up 30% of overall inflation and 40% of core CPI and is just one example of how lagging indicators create challenges for forward looking policies. It’s also not long ago that inflation was considered transitory, a reminder of how quickly policy can change.
While these macroeconomic trends are worth considering, business owners must also keep a close eye out for growth opportunities while at the same time managing risk. The risk has long been expected to drive a wave of Baby Boomer sellers into the market. While we have yet to truly see that grey tsunami swell, the clouds are brewing. According to surveyed owners, almost half (48%) are selling due to retirement.BizBuySell Insight Report 10-19-2022