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NAR Chief Economist: The Fed Reserve will be forced to raise interest rates multiple times, pushing mortgage rates up and slowing home sales, price increases.<\/span><\/span><\/span><\/p>\n<\/div>\n

WASHINGTON \u2013 The rate of inflation reached 8.5% in March, continuing at a 40-year high and showing few signs of relief for consumers. Higher gas prices, food, and housing costs fueled the consumer price index\u2019s jump.<\/span><\/span><\/span><\/p>\n

\u201cAggressive inflation will force the Federal Reserve to raise interest rates multiple rounds this year and actively pursue quantitative tightening,\u201d says Lawrence Yun, chief economist of the National Association of Realtors<\/span>\u00ae<\/span><\/span><\/span><\/span><\/span>. \u201cThat is why mortgage rates recently have shot up so high. Higher mortgage rates will inevitably pull home sales down in the coming months and slow home price appreciation.\u201d<\/span><\/span><\/span><\/p>\n

Yun projects a 10% decrease in home sales this year. But he continues to say home prices will increase, gaining 5% by the end of the year.<\/span><\/span><\/span><\/p>\n

The rising costs of living will likely hurt more Americans\u2019 wallets. Rising prices are outstripping the fastest wage gains in four decades, MarketWatch reports. Surveys show consumers are increasingly concerned about inflation as well.<\/span><\/span><\/span><\/p>\n

Gas prices are up 48% from a year ago. The price hikes\u00a0account\u00a0for more than half of the increase last month in the cost of living. The Russian invasion of Ukraine has driven up the price\u00a0of oil to a 13-year high. That has a widespread impact on consumers, not just because of the increasing costs of driving but also flying and transporting goods.<\/span><\/span><\/span><\/p>\n

Grocery prices have increased 10% in the past year, the largest jump since 1981, MarketWatch reports.<\/span><\/span><\/span><\/p>\n

Also, the cost of rent and shelter costs are rising. Over the last year, the cost of shelter has increased 5%, marking the largest increase in four decades, MarketWatch reports. Housing costs tend to comprise about a third or more of a typical household budget.<\/span><\/span><\/span><\/p>\n

Rents rose by 4.4%, but many other data sources have pointed to even higher increases, Yun says.<\/span><\/span><\/span><\/p>\n

\u201cHome price is not part of the consumer price index but has hurt first-time buyers, especially with rising mortgage rates,\u201d Yun says. \u201cClearly, more construction of both apartments and single-family homes is needed.\u201d<\/span><\/span><\/span><\/p>\n

Source: \u201cInstant Reaction: Inflation, April 12, 2022,\u201d National Association of Realtors\u00ae Economists\u2019 Outlook blog and \u201cU.S. Inflation Rate Leaps to 8.5%, CPI Shows, as Higher Gas Prices Slam Consumers,\u201d MarketWatch (April 12, 2022)<\/span><\/span><\/span><\/p>\n

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\nAuthor: marlam<\/p>\n","protected":false},"excerpt":{"rendered":"