May 21, 2024 | Driving It Home with ABoR's Housing Economist

In this episode of Driving It Home, ABoR & Unlock MLS CMO Kelea Youngblood and Housing Economist Dr. Clare Knapp discuss recent economic indicators and their implications for mortgage rates. They begin by examining the latest Consumer Price Index (CPI) data, highlighting a 3.4% year-over-year increase in headline inflation and a 3.6% rise in the core CPI. Dr. Knapp notes that while these figures met expectations, the slightly lower-than-expected month-over-month headline inflation led to a favorable market reaction, with treasury yields falling and stocks rallying. The discussion emphasizes the significance of these numbers, noting the lowest core inflation reading since April 2021, suggesting a positive trend.   The conversation then shifts to the Federal Reserve's upcoming decisions on interest rates. Dr. Knapp predicts that the Fed is likely to hold rates steady in June, with a potential rate cut in September. This forecast is based on recent statements from Fed Chair Powell and the current economic data. They also discuss the implications for mortgage rates, noting a recent decline from 7.22% to just over 7%. Dr. Knapp suggests that mortgage rates are expected to gradually decline over the latter half of 2024, especially following the anticipated rate cut in September, potentially making it a favorable time for homebuyers.   The podcast ends by covering new home construction statistics and ongoing research at ABoR. Dr. Knapp shares insights from ABoR's Buy vs. Rent Index, which shows that homeownership tends to be more financially favorable than renting and investing in the stock market, especially over longer periods. They discuss the current affordability trends in new home construction, noting a significant decrease in homes priced under $300,000, but a corresponding increase in those priced between $300,000 and $600,000.   Download a transcript of this episode: https://www.abor.com/content/uploads/2024/05/DIH-5-21-24-1.pdf   Links Mentioned: Broker & Sales Manager Meeting May 30: https://www.abor.com/event/broker-sales-manager-forum-2 Consumer Price Index (CPI): https://www.bls.gov/news.release/pdf/cpi.pdf ABoR Research: https://www.abor.com/research Buy Vs. Rent Index: https://www.abor.com/buyrentindex ABoR Benefits: https://www.abor.com/benefits   Listen On: Apple: https://podcasts.apple.com/us/podcast/driving-it-home-with-abors-housing-economist/id1714289732 YouTube: https://www.youtube.com/playlist?list=PLzH_caxJ3VPq5iExWilqZOahnREgSFgqC  Connect with us on socials: https://www.abor.com/socials Connect with Dr. Clare Losey on LinkedIn: https://www.linkedin.com/in/clare-losey  Have feedback? Email us at [email protected].