Inflation numbers are calming, and mortgage rates will soon reach 3-year lows. The latest consumer price index rose by 2.4%, one of the slowest rises since the early years of COVID in 2021.
The light inflation is being driven by rapidly decelerating housing shelter costs. Rents were up 3% year over year, thanks to a strong ramp-up in housing supply in southern states. Gasoline prices were lower, greatly benefiting REALTORS® who drive more than the average American. However, utility bills are rising strongly. Home insurance costs decelerated slightly, rising by 6.9% from a year ago, rather than 8.2% in the previous month’s data.
Housing shelter costs will continue to decelerate, thereby further containing inflation in the upcoming months. To get ahead of the curve, the Federal Reserve could consider a rate cut at its next meeting.
