Stagflation Risk Rising Fast as US Economy Falls Out of Balance

On The Market

BiggerPockets

News, Investing, Business, Education

4.8 • 820 Ratings

🗓️ 24 April 2025

⏱️ 30 minutes

🔗️ Recording | iTunes | RSS

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Summary

Stagflation: the combination of two of the worst economic conditions—inflation and slow/no growth. With stagflation, prices rise, asset growth shrinks, unemployment increases, consumer confidence drops, and economic pain spreads. This is the first time in almost fifty years that the US has had to deal with what is an extremely rare economic scare. And with the Fed already under immense pressure to lower rates, is the US economy out of escape routes? Today, we’re talking about stagflation—a trend that has worried major economists for months. Economic “warning signs” are already flashing as recession and inflation risks grow. But if we get hit with stagflation, how bad will it be, how long will it last, and how will it affect real estate? I’m explaining it all today. We’ll walk through what happened during the 1970s stagflation crisis, how home and rent prices were affected, what’s causing today’s stagflation risk, and whether the Fed has any power left to mitigate the worst consequences of it. This could affect every American and anyone investing in American real estate, but have my investing plans changed? I’ll tell you what I’m doing next. In This Episode We Cover Stagflation explained and why it’s becoming a greater risk in 2025 Why the Fed may be out of options to fight stagflation and what’s causing it Reviewing the 1970s stagflation crisis and what happened to real estate prices then Inflation forecasts for 2025 and how much more prices could rise My current investing plan and how I’m looking at real estate if stagflation strikes And So Much More! Links from the Show Join the Future of Real Estate Investing with Fundrise Join BiggerPockets for FREE Sign Up for the On the Market Newsletter Find an Investor-Friendly Agent in Your Area Real Estate Investors—You Should Be Very Concerned About Stagflation Dave's BiggerPockets Profile Buy Real Estate the Right Way in Any Market Cycle with “Real Estate by the Numbers” Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/on-the-market-315 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email [email protected]. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	The economy could be facing a one-two punch of slowing growth and higher inflation in the coming months.
0:06.8	And this particular dynamic is known as stagflation, and it can put an economy into a really difficult spot.
0:15.2	Today, on on the market, we're diving into this important topic of stagflation,
0:19.9	what it is, why there are new
0:21.4	concerns about it, key warning signs to watch for, and what to do if it arrives.
0:31.1	Hey, everyone, it's Dave, head of real estate investing at Bigger Pockets. In addition to that job,
0:39.2	I am also a housing market analyst. I'm an investor and a somewhat obsessive watcher of everything having to do with the
0:45.2	economy. And as I've been doing that in recent weeks, I've seen a new trend develop. And this
0:51.7	trend is really coming from people on both sides of the aisle and from
0:55.7	many different backgrounds. And what I'm seeing is people talking about the prospects and risks
1:01.9	of something called stagflation. This term, you may have heard it before, it's been thrown around
1:07.4	here and there. But fears of stagflation currently are on the rise.
1:12.6	And although, to be clear, we do not yet have evidence of stagflation, there are, in my
1:19.2	opinion, enough warning signs going off that we should all be talking about this.
1:24.4	Stackflation is one of those things that can be really, really detrimental to
1:29.1	economy. It could set it back for years. And so if stackflation does actually arise, it's going
1:35.6	to impact the housing market and the day-to-day lives of almost all Americans. So I really
1:41.2	encourage you all to pay a close attention here to this episode and this important
1:46.6	issue. That said, let's start off with the simple stuff. What is stagflation? Stagflation
1:52.5	is the unfortunate combination of two negative economic conditions at the same time. High inflation
2:00.1	and recession or slow growth.
2:03.4	And you probably all know this, but either of those things, one of them on their own is bad
	...

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