Below is a brief excerpt and the Chart of the Day from today's Early Look note written by Daryl Jones.
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Consequently, housing inventory has started to rise, reaching a near four-year high of approximately 1.4 million. While this remains historically low, the rate of change matters. If inventory continues to build alongside high rates, we could finally see deflation in the housing component of inflation. So far, though, that hasn’t been the case. In October’s CPI report, the Shelter component was up 4.9% year-over-year, significantly outpacing the Headline CPI of 2.6%. This was corroborated by FHFA data yesterday that showed (and in the Chart of the Day) a 4.3% year-over-year increase in home prices in Q3. On the bright side, this is the second-lowest year-over-year increase in a decade, but it follows a massive surge in prices, making the market broadly unaffordable. |
