Rising home prices and income inequality priced many out of the market, but for strivers who aspired to homeownership, the latest ruptures to the economy hit hard. The release of the new government’s sweeping plan for debt-funded tax cuts led to a big uptick in interest rates this week that roiled the mortgage market. Many homeowners are calculating their potential future mortgage payments with alarm, amid soaring energy and food prices and a general cost-of-living crisis.

Before they were informed they were no longer eligible, the family had been in the final stages of applying for a five-year fixed-rate mortgage on an apartment priced at £519,000, or around $576,000, in the leafy parish of Loughton, a town about 40 minutes north of London by train where the streets fill with students in the afternoon and the properties span from lower-end apartments to million-pound mansions.

according to the Financial Conduct Authority. And more than a third of all mortgages are on fixed rates that expire within the next two years, most likely exposing those borrowers to higher rates, too. By contrast, the vast majority of mortgages in the United States are locked in for 30-year fixed terms.

And the abrupt surge in interest rates could threaten to set off a housing market crisis, analysts at Oxford Economics wrote in a note on Friday, adding that if mortgage rates stayed at the levels now being offered, that would suggest that house prices were around 30 percent overvalued “based on the affordability of mortgage payment.”

“This just adds a significant further strain to finances in the order of hundreds of pounds a month,” said David Sturrock, a senior research economist at the Institute for Fiscal Studies, adding that the squeeze on household budgets will affect the broader economy.

Uncertainty and even panic was clear this week, with many homeowners seeking financial advice. Mortgage brokers said they were receiving a higher volume of inquiries than normal from people stressed about refinancing their loans.

“You can feel the fear in people’s voices,” said Caroline Opie, a mortgage broker working with Ms. Anne who said she had not seen this level of worry in a long time. One couple this week even called her the morning of their wedding, she said, to set an appointment to refinance their mortgage next week.

the war in Ukraine. “Something has got to give,” he said. “Prices are too high anyway.”

To save for the deposit, Mr. Szostek, 37, picked up construction shifts and cleaning jobs when restaurants closed during Covid-19 lockdowns. A £5,000 inheritance from Ms. Anne’s grandfather went into their deposit fund. At a 3.99 percent interest rate, the mortgage repayments were set to be about £2,200 a month.

“I wanted to feel at home for real,” said Ms. Anne, adding she would have been the first in her family to own a property. Mr. Szostek called it “a lifelong dream.”

On Wednesday night, that dream still seemed in reach: The mortgage dealer Ms. Opie had found another loan, which they rushed to apply for.

The higher interest rate — 4.6 percent — will mean their new monthly mortgage payment will be £2,400, the upper limit of what the Szostek family can afford. Still, they felt lucky to secure anything at all, hoping it will mean their promises to their children — of bigger bedrooms, more space, freedom to decorate how they like — will materialize.

They would wait to celebrate, Mr. Szostek said, until they had the keys in hand.

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More Americans Filed Unemployment Claims Last Week

By Associated Press

and Newsy Staff
September 22, 2022

First time applications for jobless aid — which generally reflect layoffs — rose by 5,000 to 213,000 last week, the Labor Department reported.

The number of Americans filing for jobless benefits rose slightly last week with the Federal Reserve pushing hard to cool the economy and tamp down inflation.

Applications for unemployment benefits for the week ending Sept. 17 rose by 5,000 to 213,000, the Labor Department reported Thursday. Last week’s number was revised down by 5,000 to 208,000, the lowest figure since May.

First-time applications generally reflect layoffs.

The four-week average for claims, which evens out some of the weekly volatility, fell by 6,000 to 216,750.

On Wednesday, the Federal Reserve raised its benchmark short-term borrowing rate by another three-quarters of a point in an effort to bring down persistent, decades-high inflation. Though gas prices have steadily retreated since summer, prices for food and other essentials remain elevated enough that the Fed has indicated it will keep raising its benchmark interest rate until prices come back down to normal levels.

Fed officials have pointed to the remarkably resilient U.S. labor market as added justification for raising rates five times this year, including three 75-basis point hikes in a row.

The Fed’s move boosted its benchmark short-term rate, which affects many consumer and business loans, to a range of 3% to 3.25%, the highest level since early 2008. The officials also forecast that they will further raise their benchmark rate to roughly 4.4% by year’s end, a full point higher than they had envisioned as recently as June.

Fed Chair Jerome Powell said that before Fed officials would consider halting their rate hikes, they want to be confident that inflation is retreating to their 2% target. He noted that the strength of the job market is fueling pay gains that are helping drive up inflation.

He emphasized his belief that curbing inflation is vital to ensuring the long-term health of the job market.

Earlier this month, the Labor Department reported that employers added still-strong 315,000 jobs in August, though less than the average 487,000 a month over the past year. The unemployment rate ticked up to 3.7%, largely because hundreds of thousands of people returned to the job market. Some didn’t find work right away, so the government’s count of unemployed people rose.

The U.S. economy has been a mixed bag this year, with economic growth declining in the first half of 2022. Investors and economist worry that the Fed’s aggressive rate hikes could force companies to cut jobs and tip the economy into a recession.

Online real estate companies RedFin and Compass recently announced job cuts as rising interest rates have cooled the housing market. The National Association of Realtors reported Wednesday that sales of existing homes fell again in August, the seventh straight monthly decline.

Other high-profile layoffs announced in recent months include The Gap, Tesla, Netflix, Carvana and Coinbase.

Additional reporting by The Associated Press.

Source: newsy.com

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Interest Rates Are Expected To Increase Again

Investors brace for another big interest rate increase this week from the Federal Reserve. The hikes are having an effect on homebuyers.

Another interest rate hike is approaching to temper inflation, but it’s flaring tempers for some who are afraid the dream of a big purchase is getting too expensive. 

“I would die to be a homeowner,” said Heather Blanchet, who’s looking for a home. 

Another three quarters of a percentage point higher interest means the standard borrowing rate to buy homes, cars and put money on a credit card is climbing. 

That’s straining people like Blanchet, who’s staring down increasing monthly payments on her would-be mortgage. 

“Getting a loan, I feel like, is increasingly hard, interest rates are crazy,” said Blanchet. 

But that’s exactly the point for the Federal Reserve, which is trying to lower white-hot demand not just for homes, but for everything.

“It’s not quite a buyer’s market yet, but it’s balancing out,” said Joy Dysart, a real estate agent.  

In the housing market it’s helping to balance the scales. While it could make a mortgage more expensive for now, it’s also leaving sellers with fewer interested buyers and less power in the deal. 

“I think we are now entering a market where sellers are working with buyers and that’s great when people are negotiating again,” said Kelly Fogul, a mortgage broker. 

Garrett and Marisa Severen know how tough it’s been for buyers. They bought a house earlier this year in cash, something they tried to avoid. 

“We probably had four houses that we really fell in love with that we lost because we didn’t do cash offers,” said Garrett Severen.  

And the number of homes being bought with cash is still above pre-pandemic levels. 

Redfin recently found more than 31% of homes are selling with all-cash offers. 

“A lot of the ‘cash buyers’ are people who are high net worth individuals who have leveraged their portfolio of assets, so they’ve taken a line of credit,” said Holly Meyes Lucus, a real estate agent.  

Still, the cooling market can be good news for people needing a mortgage, like Alexis Sande and her fiance. They just bought a new home in Florida and had a much easier time of it than they would have just months before. 

“This house had been on the market for about five days. With the interest rates going up, we didn’t have to get into a bidding war with anybody or offer more money for the home or anything like that,” said Sande. 

Still, plenty will feel the pinch of a higher rate. 

And many like Zach Van Emmerick are counting on their lucky stars they bought a home when they did. 

“I think if I would have waited another month and that would have been at 6% it probably would have limited my purchasing power and it probably would have pushed me out of where I wanted to live and the city I wanted to live in. I don’t know how much that would have raised my mortgage payment a month, a couple hundred and that hits pretty hard,” said Emmerick.  

Source: newsy.com

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KTNV: More Latinos Are Becoming Homeowners, But Roadblocks Remain

By Tricia Kean

and KTNV-TV
September 19, 2022

More than 650,000 Latinos became homeowners nationwide from 2019 to 2021and now over half of all Latino-Americans own a home.

LAS VEGAS (KTNV) — 700,000 Latinos live in Clark County, and many of them are buying homes. In fact, a recent report by the National Association of Hispanic Real Estate Professionals says Latinos across the country are buying homes more than ever before.

Today, nearly half of all Hispanics are homeowners. But are they buying in Las Vegas?

“I for sure wanted to have at least three bedrooms in the house,” Hugo Organista told KTNV.

He bought a home last November. Organista says he came to Las Vegas after struggling to find something in the Phoenix area.

“(I) realized that I probably wasn’t going to get what I wanted and placed four offers on a house there, got beat out by a cash buyer every time,” Organista said.

Fortunately, he was able to scoop up a move-in-ready house near Boulder Highway and Tropicana Avenue. It’s a dream the Mexican native says he still can’t believe.

“When my family came here, we were eating pizza on the floor. We didn’t even have enough for a dining room table,” Organista said.

Organista said he was able to buy a home at a young age thanks to his mom. He credits her with teaching him how to work hard, save money and pay bills on time.

“You know, like she would drag me down to JC Penney’s to go make a cash payment for her credit card because she didn’t want it to be late. So, I kind of grew up with that in mind,” he said.

LATINO HOUSEHOLDS

In the Latino community, Organista isn’t alone. More than 650,000 Latinos became homeowners nationwide from 2019 to 2021. A lot of them are buying in the Las Vegas valley, says Myra Rivera, with the local chapter of the National Association of Hispanic Real Estate Professionals.

“(In) 2021, we went up a little bit over 48 percent in Latino households, and that’s projected to continue to go up,” Rivera said. “I think in the last few years that I’ve been in business, and also just looking at the stats, those numbers have been increasing every single year.”

In fact, as of 2021, more than 40% of Hispanic adults 45 years old and younger are mortgage ready.

“And in the next few years, we’re going to see a lot of those Latinos come into the market because now they’re ready. Their next step is finding a home,” Rivera said.

Many interested homebuyers are looking here in Las Vegas because they want new construction, Rivera added.

FROM CALIFORNIA

“We get people from California coming in, used to the older homes, and they see Vegas homes mostly in the 2000s and they’re like, Oh, wow, this is new,” says Rivera.

Rivera admits it’s still a tough market for some Hispanic families. Many still struggle with poor credit and are looking for homes at a lower price point.

“Latino households usually are larger. They have a lot of kids or their parents living with them. So, they need at least 3 to 5 bedrooms. Finding a house that’s 3 to 5 bedrooms in that little price point… is sometimes a little difficult,” says Rivera.

But Rivera is happy to see the situation is improving. She says many younger Latinos see the benefits to buying versus renting.

“You’re starting to see the next generations or the next one in the family is buying younger or they’re upgrading sooner… They see it as ‘I’m investing, I’m upgrading. My family needs it.’ They’re not scared of the process,” says Rivera.

Organista says it’s encouraging to hear Latinos his age and younger are learning, anything is possible.

“It’s a testament to what happens when we start to tackle systematic injustices… Knowledge is like step number one. That’s like half the battle. Then the other half of that is actually putting it into practice,” says Organista.

This story was originally published by Tricia Kean on ktnv.com.

Source: newsy.com

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U.S. Markets Sink Ahead Of Another Expected Interest Rate Hike

By Associated Press
September 19, 2022

Futures for the Dow Jones industrials and for the S&P 500 each tumbled nearly 1% Monday morning.

Wall Street pointed lower before the opening bell Monday ahead of another expected large interest rate hike from the U.S. Federal Reserve.

Futures for the Dow Jones industrials and for the S&P 500 each tumbled 0.9%.

Britain was observing a day of mourning for Queen Elizabeth II. Japan’s markets were closed for a holiday.

Germany’s DAX lost 0.4%, while the CAC 40 in Paris shed 1%.

Markets have been on edge because of stubbornly high inflation and the increases in interest rates being used to fight it. The fear is that the Fed and other central banks might overshoot their policy targets, triggering a recession.

Most economists forecast that the Fed will jack up its primary lending rate another three-quarters of a point when the central bank’s leaders meet this week.

“Fact is, hawkish expectations built on the ‘hot under the hood’ U.S. inflation print means that markets have good reason to be braced for headwinds amid prospects of higher (for longer) rates; and arguably ‘higher for longer’ USD (dollar) as well,” Vishnu Varathan of Mizuho Bank said in a commentary.

Hong Kong’s Hang Seng lost 1% to 18,565.97 while the Shanghai Composite index shed 0.4% to 3,115.60. Australia’s S&P/ASX 200 gave up 0.3% to 6,719.90. In Seoul, the Kospi sank 1.1% to 2,355.66.

Japan’s central bank meets Wednesday and Thursday amid rising pressure to counter a sharp decline in the yen’s value against the dollar. That has raised costs for businesses and consumers, who must pay more for imports of oil, gas and other necessities.

However the Bank of Japan has held firm so far in maintaining an ultralow benchmark rate of minus 0.1% in hopes of stimulating investment and spending.

On Friday, a stark warning from FedEx about rapidly worsening economic trends elevated anxiety in markets. The S&P 500 fell 0.7%, while the Nasdaq lost almost 1%. The Dow lost almost half percent.

The S&P 500 sank 4.8% for the week, with much of the loss coming from a 4.3% rout on Tuesday following a surprisingly hot report on inflation.

All the major indexes have now posted losses four out of the past five weeks.

FedEx sank 21.4% for its biggest single-day sell-off on record Friday after warning investors that its fiscal first-quarter profit will likely fall short of forecasts because of a drop-off in business. The package delivery service is also shuttering storefronts and corporate offices and expects business conditions to further weaken.

Higher interest rates tend to weigh on stocks, especially the pricier technology sector. The housing sector is also hurting as interest rates rise. Average long-term U.S. mortgage rates climbed above 6% last week for the first time since the housing crash of 2008. The higher rates could make an already tight housing market even more expensive for American homebuyers.

But the rate hikes have yet to cool the economy substantially.

Last week, the U.S. reported that consumer prices rose 8.3% through August compared with last year, the job market is still red-hot and consumers continue to spend, all of which give ammunition to Fed officials who say the economy can tolerate more rate hikes.

In other trading Monday, U.S. benchmark crude lost $2.01 to $83.10 per barrel in electronic trading on the New York Mercantile Exchange. It edged up 1 cent to $85.11 per barrel on Friday.

Brent crude oil gave up $1.93 to $89.42 per barrel.

The dollar strengthened to 143.57 Japanese yen from 142.94 yen. The euro slipped to 99.93 cents from $1.0014.

Additional reporting by The Associated Press.

Source: newsy.com

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Fewer Americans Filed Unemployment Claims Again Last Week

By Associated Press
September 15, 2022

First-time applications for jobless aid fell by 5,000 to 213,000 last week, the Labor Department reported.

The number of Americans applying for unemployment benefits fell again last week to a four-month low even as the Federal Reserve continues its aggressive interest rate cuts to bring inflation under control.

Applications for jobless aid for the week ending Sept. 10 fell by 5,000 to 213,000, the Labor Department reported Thursday. That’s the fewest since late May.

First-time applications generally reflect layoffs.

The four-week average for claims, which offsets some of the weekly volatility, fell by 8,000 to 224,000.

The number of Americans collecting traditional unemployment benefits inched up by 2,000 for the week that ended Sept. 3, to 1.4 million.

Hiring in the U.S. in 2022 has been remarkably strong even in the midst of rising interest rates and weak economic growth. The Federal Reserve has aggressively raised interest rates in an effort to bring down inflation, which generally also slows job growth.

Earlier this month, the Labor Department reported that employers added still-strong 315,000 jobs in August, though less than the average 487,000 a month over the past year. The unemployment rate ticked up to 3.7%, its highest level since February, but for a healthy reason: Hundreds of thousands of people returned to the job market, and some didn’t find work right away, so the government’s count of unemployed people rose.

The U.S. economy has been a mixed bag this year. Economic growth has declined in the first half of 2022, which, by some informal definitions, signals a recession.

But businesses remain desperate to find workers, posting more than 11 million job openings in July, meaning there are almost two job vacancies for every unemployed American.

Inflation continues to be the biggest obstacle for a healthy U.S. economy. The rise in consumer prices slowed modestly the past couple months, largely due to falling gas prices. But overall, prices for food and other essentials remain elevated enough that the Federal Reserve has indicated it will keep raising its benchmark interest rate until prices come back down to normal levels.

Most economists expect the Fed to raise its benchmark borrowing rate by three-quarters of a point when it meets next week.

The Fed has already raised its short-term interest rate four times this year and Chairman Jerome Powell has said that the central bank will likely need to keep interest rates high enough to slow the economy “for some time” in order to tame the worst inflation in 40 years. Powell has acknowledged the increases will hurt U.S. households and businesses, but also said the pain would be worse if inflation remained at current levels.

Some of that so-called pain has already begun, particularly in the housing and technology sectors. Online real estate companies RedFin and Compass recently announced job cuts as rising interest rates have tripped up the housing market.

Other high-profile layoffs announced in recent months include Tesla, Netflix, Carvana, and Coinbase.

Additional reporting by The Associated Press.

Source: newsy.com

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Long-Term Mortgage Rates Now At Highest Point Since 2008

By Associated Press
September 9, 2022

The 30-year mortgage rate jumped to 5.89% from 5.66% last week, according to mortgage buyer Freddie Mac. One year ago, the rate stood at 2.88%.

Average long-term U.S. mortgage rates jumped again this week, hitting the highest levels in almost 14 years and pushing even more would-be buyers out of the market.

Mortgage buyer Freddie Mac reported Thursday that the 30-year rate jumped to 5.89% from 5.66% last week. That’s the highest the long-term rate has been since November of 2008, just after the housing market collapse set off the Great Recession. One year ago, the rate stood at 2.88%.

The average rate on 15-year, fixed-rate mortgages, popular among those looking to refinance their homes, rose to 5.16% from 4.98% last week. That’s the first time the 15-year rate has been above 5% since 2009, as the real estate market went into a years-long slump. Last year at this time the rate was 2.19%.

Rising interest rates — in part a result of the Federal Reserve’s aggressive push to tamp down inflation — have cooled off a housing market that has been hot for years. Many potential home buyers are getting pushed out of the market as the higher rates have added hundreds of dollars to monthly mortgage payments. Sales of existing homes in the U.S. have fallen for six straight months, according to the National Association of Realtors.

Mortgage rates don’t necessarily mirror the Fed’s rate increases, but tend to track the yield on the 10-year Treasury note. That’s influenced by a variety of factors, including investors’ expectations for future inflation and global demand for U.S. Treasurys.

Recently, faster inflation and strong U.S. economic growth have sent the 10-year Treasury rate up sharply, to 3.27%.

The Fed has raised its benchmark short-term interest rate four times this year, and Chairman Jerome Powell has said that the central bank will likely need to keep interest rates high enough to slow the economy “for some time” in order to tame the worst inflation in 40 years.

The government reported the U.S. economy shrank at a 0.6% annual rate from April through June, a second straight quarter of economic contraction, which meets one informal sign of a recession. Most economists, though, have said they doubt that the economy is in or on the verge of a recession, given that the U.S. job market remains robust.

Applications for jobless aid fell last week to their lowest level since May, despite the Fed’s moves to tame inflation, which usually tends to cool the job market as well.

Additional reporting by The Associated Press.

Source: newsy.com

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Inflation Eases As Consumer Prices Rise 6.3% In July, Down From June

By Associated Press
August 26, 2022

Consumer prices were up 6.3% in July from a year earlier, down slightly from an annual 6.8% increase in June, according to the Commerce Department.

Inflation eased slightly last month as energy prices tumbled, raising hopes that the surging costs of everything from gasoline to food may have peaked.

According to a Commerce Department report Friday that is closely watched by the Federal Reserve, consumer prices rose 6.3% in July from a year earlier after posting an annual increase of 6.8% in June, the biggest jump since 1982. Energy prices made the difference in July: They dropped last month after surging in June.

So-called core inflation, which excludes volatile food and energy prices, rose 4.6% last month from a year earlier after rising 4.8% in June. The drop — along with a reduction in the Labor Department’s consumer price index last month — suggests that inflationary pressures may be easing.

On a monthly basis, consumer prices actually fell 0.1% from June to July; core inflation blipped up 0.1%, the Commerce Department reported.

Inflation started rising sharply in the spring of 2021 as the economy rebounded with surprising speed from the short but devastating coronavirus recession a year earlier. Surging customer orders overwhelmed factories, ports and freight yards, leading to delays, shortages and higher prices. Inflation is a worldwide problem, especially since the Russian invasion of Ukraine drove up global food and energy prices.

On Friday, regulators in the U.K. said that residents will see an 80% increase in their annual household energy bills.

In the United States, the Commerce Department’s personal consumption expenditures (PCE) index is less well known than the Labor Department’s consumer price index (CPI).

But the Fed prefers the PCE index as a gauge of inflationary pressures, partly because the Commerce index attempts to measure how consumers adjust to rising prices by, for example, substituting cheaper store brands for pricier name brands.

There is evidence just in the last several months that that is happening.

CPI has been showing higher inflation than PCE; Last month, for instance, CPI was running at an 8.5% annual pace after hitting a four-decade-high 9.1% in June. One reason: The Labor Department’s index gives more weight to rents, which have soared this year.

The Commerce Department also reported Friday that Americans’ after-tax personal income rose 0.3% from June to July after adjusting for inflation; it has fallen in June. Consumer spending rose 0.2% last month after accounting for higher prices.

The Fed was slow to respond to rising inflation, thinking it the temporary result of supply chain bottlenecks. But as prices continued to climb, the U.S. central bank moved aggressively, hiking its benchmark interest rate four times since March.

Fed Chair Jerome Powell was scheduled to give a speech Friday at an economic conference in Jackson Hole, Wyoming, where he was expected to shed light on the Fed’s plans for future interest rate hikes.

“Admittedly, with headline PCE inflation still at 6.3% and core PCE inflation at 4.6%, we don’t expect the Fed suddenly to announce a pivot at Jackson Hole,” Paul Ashworth, chief North America economist at Capital Economics, said in a research note. “But even better news on inflation over the coming months is likely to convince the Fed to change course next year, despite any hawkish rhetoric coming from officials now.”

Price pressures may be easing as the U.S. economy slows. Gross domestic product — broadest measure of economic output — shrank in the first half of 2020 as borrowing costs increased. The housing market has been hit especially hard. And supply chain backlogs have started to unsnarl.

Additional reporting by The Associated Press.

Source: newsy.com

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Housing Market Is Cooling Off, But Interest Rates May Pause Price Drop

Sellers are taking advantage of the market, driving down prices with more inventory, but interest rates might not make affordability better.

Prices are finally dropping in one of the nation’s most expensive housing markets. But as interest rates rise, home affordability is changing more slowly.

“You’re either gonna have to pay more for that house because the loan is going to cost more, or you’re gonna have to downsize the kind of house that you want,” said Michelle Singletary, author of “What To Do With Your Money When Crisis Hits.”

Some experts are urging first-time buyers especially to wait.

“I think right now is an opportunity for the market to settle back down a little bit, although still a great seller’s market,” said David Hall, a mortgage lender.

Experts and forecasters see a cooling market in some cities and a scale tipping more in the buyer’s direction. But we’re not headed for a nationwide market crash.

“This is not a situation where it’s going to drastically drop in price,” said realtor Sindy Ready. “They’ll be small corrections.”

Sellers are slashing asking prices out west, where home prices reached some of the highest levels in the country amid the boom earlier this year. In southern California, the median home price dropped more than 1% in July — now $20,000 off its spring peak, according to real estate firm DQNews.

“Somebody who’s not a cash buyer may actually be able to buy a house, so from a buyer’s perspective, it’s a good time to get in the market,” Ready said.

As sellers try to take advantage of the last of the seller’s market, they’re improving inventory for buyers, helping to speed up the cool down.

Now, the Federal Reserve is eyeing another interest rate hike next month.

“Date the rate, marry the house,” said Frank Fuentes, loan officer at New American Funding. “Purchase your home, and you’re gonna have the opportunity, whether it’s in six months or a year or a year and a half, to refinance and lower your interest rate back down.”

Another hike could make homes more expensive for borrowers, but it could also help keep the cool going down.

Source: newsy.com

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It Was the Housing Crisis Epicenter. Now the Sun Belt Is an Inflation Vanguard.

A.J. Frank watched the Phoenix real estate market and its entire economy implode as he was graduating from high school in 2009, a scarring experience that has made him a cautious saver. He is again living through a major economic upheaval as the cost of living climbs sharply.

Phoenix — among the hardest-hit cities during the housing crisis — is now on the leading edge of another painful economic trend as the United States faces the most rapid inflation in 40 years. The city is experiencing some of the fastest price increases in the nation, something Mr. Frank has felt firsthand.

His landlord tried to raise his rent nearly 30 percent this year, prompting him to move. Mr. Frank, a 31-year-old engineer, is still paying $250 a month more than he was previously, and rising grocery and gas bills have reduced his disposable income.

national rate of 8.5 percent in July. Prices in the Southern United States have risen 9.4 percent over the past year, the fastest pace of any large region in the nation and more rapid than in the Northeast, where prices are up 7.3 percent.

surged earlier this year. Because many Sun Belt cities depend on cars and air-conditioning, those purchases make up a larger percentage of consumer budgets in the region. And, just as it did in 2008, housing is playing a crucial role — this time, through the rental market, which is a major contributor to overall inflation. In Phoenix, rents are up 21 percent from a year ago, and in Miami, they are up about 14 percent. For urban dwellers nationally, rent is up only about half as much, 6.3 percent.

The Sun Belt’s intense bout of inflation matters for several reasons. While inflation is painful everywhere, it is having a disproportionate impact on families in cities like Tampa Bay, where prices have shot up faster than in areas like New York City. Demand at food banks and for eviction counselors has jumped across the region, providers said, as signs of that distress manifest.

Real-time market rent trackers that reported prices shooting up in Sun Belt cities last year are now showing bigger increases in places like New York, San Jose and Seattle.

Those market rent increases take time to trickle into official inflation figures because of the way the government calculates its data. Much as Phoenix’s official inflation numbers are surging now partly because of the run-up in market rents in 2021, nascent increases in big coastal cities could keep pressure on inflation in months to come. And the effect could be palpable at a national level: New York and its suburbs account for about 11 percent of the nation’s rental housing-related costs in the Consumer Price Index, compared to about 1 percent for Phoenix.

“Even if we get a slowdown in the Sun Belt, it may not be enough to offset what we’re seeing in other markets,” said Omair Sharif, founder of Inflation Insights.

Federal Reserve officials noted that risk at their July meeting, according to minutes released Wednesday, observing that “in some product categories, the rate of price increase could well pick up further in the short run, with sizable additional increases in residential rental expenses being especially likely.”

The Fed has been raising interest rates since March to try to slow consumer and business demand and cool inflation and is expected to lift them again at its meeting in September.

To date, much of the regional divide in price increases — from rents to consumer goods and services — has traced back to migration. People have been flocking to less expensive cities from big coastal ones for years, but that trend accelerated sharply with the onset of the pandemic. The pattern is playing out across both the Mountain West, where inflation is also remarkably high, and the Sun Belt.

experienced some of the biggest population gains in 2021, adding about 221,000 and 93,000 residents through domestic migration. Phoenix and Tampa added newcomers especially rapidly. “As people have basically poured into these Sun Belt metros, that’s put additional demand on the housing market, and supply has struggled to keep up,” said Taylor Marr, an economist at Redfin. “A lot of the inflation variation is pretty correlated with these migration patterns.”

leases are 35 percent more expensive than at the start of the pandemic but have risen only 2 percent in the past six months, for instance.

Adam Kamins, a director at Moody’s Analytics who focuses on regional and local forecasting, said he expected inflation to begin to equalize across the country as price increases in the South fade more swiftly.

“I think there’s going to be some level of convergence in regional inflation,” Mr. Kamins said. “We just haven’t seen it yet.”

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