Inflation Report Today’s Focus

We’ve had today marked on the calendar for a while, knowing that the Consumer Pricing Index (CPI) report was coming out. We had high hopes that it would be a pivot point for inflation. But it didn’t turn out quite like we were hoping, there was a little bit of a scare over the weekend because there was talk about the possibility that the month-over-month inflation numbers might be increasing.

Fortunately, the speculation was wrong. We came in just a little lower month-over-month, which puts us at 10 months in a row of inflation coming down. That’s good news!

The important thing I want to point out is that this housing inflation is 43% of CPI. Long story short, that number appears to have crested now. It’s a major lagging indicator and is finally on the way down. So, it should really start to help with inflation, which will start to help interest rates.

We’ve maxed out on this number at 9.1%, todays read came in at 4.9%, and the target number is roughly 2%. It looks like it could start see significant moves over the next few months.

What Does This Mean for Real Estate?

These changes can have a noticeable impact on real estate. As inflation comes down, then mortgage rates will follow.

This has been my warning for a while: We are already seeing housing prices starting to tick up again because inventory is so low. More and more buyers are stepping into the market. I can’t stress this enough: if you are thinking about buying this year, then you might have your best buying opportunity right now.

If these rates come down, it will create a huge frenzy in the industry. I sound like a broken record because I say this every week. But it’s real and we are already seeing an increase in demand – and rates haven’t started coming down yet. We’re still hovering in the mid-6’s.

We don’t know what will happen in the future, but it really looks like this will be the pivot point since rates will likely be coming down soon. At that point, it will start getting harder to get into a house again because the demand will be so high.

If you want to learn more about your options for loans based on your financial situation, then reach out to me any time. I’m here to help with all of your mortgage needs!