Housing Up, Inflation Down – Things are Right on Projections

On the mortgage front this week, inflation numbers came out this morning. CPI is still trending lower, which is a good sign. You can see in the chart below: our high was 9.1%, now we are down to 5% on the headline number.

This is a significant improvement! Of course, it’s still too high, but at least we are seeing it come down. As a result, mortgage bonds are seeing the change – which is great because it is going to help interest rates.

Next month’s CPI number will be a real turning point, because hopefully we are going to see housing catching up and start to drop.

Housing Prices are Increasing

Another thing that feels counter-intuitive: a recent report for March housing shows that prices are increasing. We are up 1% month-over-month. I don’t expect to see this every month, so we can’t annualize it and assume that it will be a 12% increase over the next year. But it’s nice to see an increase after dropping for 8 months in a row.

By the way: this pattern is common this time of year. As spring begins, people are starting to come out and look at houses. Also, part of what’s driving this is that we still have such low inventory. The combination of low inventory and more buyers coming into the market will naturally drive prices up.

Don’t Wait to Buy!

This is my message to everyone: If you are thinking about buying, do not wait for rates to come down! The more rates come down, the more people it will pull into the market and it’s likely that prices will continue to go up from here – those are the current projections.

Of course, there is always a risk of things going crazy in the world or geo-political issues causing problems. We never know what the future has in store. But I just wanted to mention that now is a great time to buy if you are sitting on the fence.

Make decisions based on objective information instead of making emotional decisions. Prices are going up and I think they will continue to rise. It will likely go slowly as these increases set in.

I still think it’s a great time to buy! If you have questions about financing or personalized recommendations, then feel free to reach out to me any time.