Residential Real Estate News
As U.S. Inflation Hits 6.45 Percent in December, NAR Says Americans Still Falling Behind
On the heels of the Fed's latest Consumer Price Index (CPI) inflation data release for December 2022, the National Association of Realtors Chief Economist Lawrence Yun issued the following statement:
"Inflation has been coming down. Mortgage rates will also, therefore, come down. The latest consumer price index of 6.45% in December is in the sixth consecutive month of deceleration after peak inflation of 9.1% in June 2022. Housing inflation due to rising rents is the one major item still showing acceleration but is soon expected to come down as well. Rents increased by 8.35% in December, its highest reading in more than 40 years. Private sector data in recent months have been pointing to near-zero rent growth in some major cities, and robust apartment construction will raise rental vacancy rates."
Yun continues, "The overall inflation of 6.45% is still above the average hourly earnings of 4.6%. Therefore, a good majority of Americans are falling behind in their standard of living. Food prices are up 10.4%, including egg price gains of 60%, a daily reminder of the grind people face. Gasoline prices have fallen by 1% from a year ago, though still up 42% from pre-pandemic levels in March 2020. The 30-year mortgage rate dropping under 6% is now a distinct possibility. The gate is beginning to open for homebuyers who got shut out in October and November when the rates went above 7%. However, there is still a housing shortage and not enough listings."
