The Federal Reserve is considering a half-point hike in interest rates (instead of the previous 0.25% increments), and if faster tightening is required, the Fed is ready to increase the pace of rate hikes. Inflation has slowed down in recent months, but the closely watched index describing “core services excluding housing” is showing little sign of disinflation.
Housing inventory has decreased again, but it remains above levels from last year, and new listings have not been increasing. Despite a decline in new listings, the days on the market are over 30 days, suggesting that there is still a valid premise for inventory growth. Supply of homes for sale remains severely constrained nationwide, and in California.
Democratic Senator Elizabeth Warren grilled Powell about American job losses being potential casualties of the Fed’s battle against high inflation. Powell argued that all Americans, not just two million, are suffering under high inflation.
- On the Home Financing front: Consumer facing mortgage rates may increase at a faster pace this year than previously anticipated.
- On the Home Buying front: There remains fewer homes for sale than would be ideal, and the “spring increase” hasn’t appeared yet.
Primary sources: CNN and Housing Wire.