Economists' Outlook

Housing stats and analysis from NAR's research experts.

Instant Reaction: CPI, April 10, 2024

March inflation figures were very bad, which also means bad news for interest rates. Consumer prices reaccelerated to 3.5%. This is higher than the 2% target inflation, which raises eyebrows regarding the Federal Reserve's delay in cutting interest rates. The bond market immediately responded with high yields to compensate for the loss in purchasing power. Mortgage rates, unfortunately, will move a notch higher and are likely to cross above 7% in the upcoming weeks. In addition, the gigantic federal budget deficit will soak up more borrowing, thereby leaving less for mortgage borrowing.

One strange data point is rent, which the official data shows at 5.8%. The unofficial data from the apartment industry indicates falling rent due to over-construction. If rent data calms, then overall inflation will automatically be lower. It is, therefore, possible to get to the 2% inflation target by year's end, even with bumps and delays.

Line graph: CPI, January 2019 to March 2024
Line graph: Rent Component, CPI, January 2019 to March 2024
Bar graph: Annual Apartment Construction, 2000 to 2023
Bar graph: Apartment Vacancy Rate, 2017 to 2024
Line graph: Rents, Q1 2022 to Q1 2024
Line and bar graph: Government Deficit: Outlay vs Tax Revenue 1990 to 2023 est