The big news this month was that inflation pushed consumer prices up 8.5%, a 40 year high and producer prices shot up 11.2%, which is the highest on record. This is bad news if you are planning on any renovation projects as everything from a new roof to new floors has seen a meaningful increase. Pandemic related supply chain issues and increased consumer demand are blamed. The Fed is committed to slowing inflation by raising rates, so more rate increases to come this year. Mortgage rates showed a meaningful jump as the average 30 year fixed rate jumped from 3.89% to 5%+. Despite the rise in rates home prices hit record highs, but keep in mind many of these solds had probably locked in at the lower rates, so I feel data from the coming months will be more telling. Fortune magazine noted that demand will most definitely decline, but this may end up being a good thing as the current growth of home prices is not sustainable. According to Corelogic, housing prices are up 31% since the pandemic started! Demand is clearly still outstripping demand. While it's currently still a seller's market, the coming months will slow buyer demand via the interest rate increases, the big question is whether inventories will increase.
