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Blockchain and real estate are familiar bedfellows, with the housing industry often cited as one of the sectors that stands to benefit most from adopting the decentralized ledger that underpins cryptocurrencies like Bitcoin.
There’s no end of Web3 real estate projects up and running now, taking advantage of blockchain’s capabilities to provide an alternative to escrow, for example, or store property ownership records. Now, as the housing market slips into a period of uncertainty that’s greater than anything it has faced since the 2008 recession, blockchain is emerging once again as a potential tool for investors in the space.
The real estate industry is on the rocks. Prospective home buyers have been waiting for prices to come down for several years so they can finally get a foothold in the market. But although home values finally appear to be softening, property has not become more affordable as that fall has been accompanied by rocketing interest rates.
Mortgage rates are now at a 20-year high, and as the Federal Reserve looks to keep raising them in order to curb excessive inflation, home buyers and investors are in a bit of a quandry. They want to take advantage of the lower prices, but are put off by the higher costs of borrowing.
Mortgage rates have been rising steadily since the beginning of the year because the Fed has successively raised its own key interest rate to try and put a stop to runaway inflation. This impacts the housing market, because the increased cost of borrowing means that mortgage rates inevitably increase.
The Fed believes it has no choice but to
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