Economists' Outlook

Housing stats and analysis from NAR's research experts.

Instant Reaction: Inflation, April 12, 2023

Calmer inflation means lower mortgage rates, eventually. The 5% consumer price inflation in March is a steady improvement from 9% last summer, 8% in autumn, 7% during Christmas, and 6% in the early months of this year. The ideal inflation of 2% is still maybe a year away, but this directional improvement is a clear signal to the Fed to change its tightening monetary policy, especially considering that many regional banks are still on the edge of further interest rate risk blowup. 

One important turn in the latest data was the deceleration in the rent component. Though still up by a whopping 8.8% from a year ago, the monthly gain was much lighter at 0.45% compared to the 0.7% to 0.9% monthly gain over the past year. It was inevitable for rent growth to soften, considering the robust apartment construction. Mortgage rates slipping down to under 6% looks very likely towards the year's end.

Federal Funds Rate, January 2019 to January 2023
Multifamily Housing Starts, 2000 to 2022
Line graph: Consumer Price Inflation, January 2019 to March 2023
Line graph: Mortgage Rates, January 2018 to January 2023
Line graph: Month-to-Month Change in Rent, January 2018 to January 2023