• Home
  • Politics
  • Health
  • World
  • Business
  • Finance
  • Tech
  • More
    • Sports
    • Entertainment
    • Lifestyle
What's Hot

Trump Announces First Post-Tariff Trade Deal

May 8, 2025

100 Funny Father’s Day Quotes for Hilariously Relatable Humor (and Plenty of Love Too)

May 8, 2025

Top 10 Benefits Of Acupuncture

May 8, 2025
Facebook Twitter Instagram
  • Contact
  • Privacy Policy
  • Terms & Conditions
Thursday, May 8
Patriot Now NewsPatriot Now News
  • Home
  • Politics

    Security video shows brazen sexual assault of California woman by homeless man

    October 24, 2023

    Woman makes disturbing discovery after her boyfriend chases away home intruder who stabbed him

    October 24, 2023

    Poll finds Americans overwhelmingly support Israel’s war on Hamas, but younger Americans defend Hamas

    October 24, 2023

    Off-duty pilot charged with 83 counts of attempted murder after allegedly trying to shut off engines midflight on Alaska Airlines

    October 23, 2023

    Leaked audio of Shelia Jackson Lee abusively cursing staffer

    October 22, 2023
  • Health

    Disparities In Cataract Care Are A Sorry Sight

    October 16, 2023

    Vaccine Stocks—Including Pfizer, Moderna, BioNTech And Novavax—Slide Amid Plummeting Demand

    October 16, 2023

    Long-term steroid use should be a last resort

    October 16, 2023

    Rite Aid Files For Bankruptcy With More ‘Underperforming Stores’ To Close

    October 16, 2023

    Who’s Still Dying From Complications Related To Covid-19?

    October 16, 2023
  • World

    New York Democrat Dan Goldman Accuses ‘Conservatives in the South’ of Holding Rallies with ‘Swastikas’

    October 13, 2023

    IDF Ret. Major General Describes Rushing to Save Son, Granddaughter During Hamas Invasion

    October 13, 2023

    Black Lives Matter Group Deletes Tweet Showing Support for Hamas 

    October 13, 2023

    AOC Denounces NYC Rally Cheering Hamas Terrorism: ‘Unacceptable’

    October 13, 2023

    L.A. Prosecutors Call Out Soros-Backed Gascón for Silence on Israel

    October 13, 2023
  • Business

    Trump Announces First Post-Tariff Trade Deal

    May 8, 2025

    Electric Vehicle Sales Nosedive As GOP Takes Buzzsaw To Biden’s Mandate

    May 7, 2025

    Tyson Foods Announces It Will Bend The Knee To Trump Admin’s New Rules

    May 7, 2025

    Federal Reserve Holds Interest Rates Steady Despite Pressure From Trump

    May 7, 2025

    ‘Wait Them Out’: John Kennedy Tells Larry Kudlow One Lie He Suspects China’s Telling US

    May 7, 2025
  • Finance

    Ending China’s De Minimis Exception Brings 3 Benefits for Americans

    April 17, 2025

    The Trump Tariff Shock Should Push Indonesia to Reform Its Economy

    April 17, 2025

    Tariff Talks an Opportunity to Reinvigorate the Japan-US Alliance

    April 17, 2025

    How China’s Companies Are Responding to the US Trade War

    April 16, 2025

    The US Flip-flop Over H20 Chip Restrictions 

    April 16, 2025
  • Tech

    Cruz Confronts Zuckerberg on Pointless Warning for Child Porn Searches

    February 2, 2024

    FTX Abandons Plans to Relaunch Crypto Exchange, Commits to Full Repayment of Customers and Creditors

    February 2, 2024

    Elon Musk Proposes Tesla Reincorporates in Texas After Delaware Judge Voids Pay Package

    February 2, 2024

    Tesla’s Elon Musk Tops Disney’s Bob Iger as Most Overrated Chief Executive

    February 2, 2024

    Mark Zuckerberg’s Wealth Grew $84 Billion in 2023 as Pedophiles Target Children on Facebook, Instagram

    February 2, 2024
  • More
    • Sports
    • Entertainment
    • Lifestyle
Patriot Now NewsPatriot Now News
Home»Business»There’s A Big, Thorny Issue Dashing Hopes Of Reining In Inflation Anytime Soon
Business

There’s A Big, Thorny Issue Dashing Hopes Of Reining In Inflation Anytime Soon

April 12, 2024No Comments5 Mins Read
Facebook Twitter Pinterest LinkedIn Tumblr Email
President Biden Hosts Japanese PM Kishida For Official State Visit
Share
Facebook Twitter LinkedIn Pinterest Email

Inflation continues to dog Americans thanks in large part to sky-high housing costs, which aren’t going away in the near future.

The cost of renting or buying a home has increased dramatically since President Joe Biden first took office, rising 5.65% from a year ago and 20.5% since January 2021, according to the Federal Reserve Bank of St. Louis. In March, price increases in shelter and gasoline contributed to over half of the overall price level increase, with shelter prices having risen 0.4% or more per month since November, according to the Bureau of Labor Statistics. (RELATED: Investors Scramble To Adjust Their Portfolios After Inflation Surge)

Due to the “stickiness” of housing prices from long-term agreements like lease terms and difficulties immediately expanding housing supply, cost increases aren’t expected to decline anytime soon, painting a grim picture of the possibility of reining in inflation.

“The pandemic initially slowed the housing market due to lockdowns and economic uncertainty,” Peter Earle, economist at the American Institute for Economic Research, told the Daily Caller News Foundation. “Inflation certainly drove housing prices, but additionally, the combination of remote work and low interest rates drove demand for suburban and rural homes. That led to even more surging prices and eventually bidding wars among limited inventory.”

The Case-Shiller U.S. National Home Price Index increased 6.0% year-over-year in January, the fastest rate since November 2022 and up from 5.6% in the previous month. The rate of increases in home prices has been accelerating since May 2023, when it declined slightly year-over-year.

See also  California’s Economic Woes Are Way Worse Than We Thought

Renting unaffordability recently reached an all-time high, with 22.4 million households spending more than 30% of their income on rent and utilities, which is up by two million in just three years. The loss in affordability accompanies a drop in low-cost rent units, meaning those below $600 a month, adjusted for inflation, which has fallen by 2.1 million since 2012.

Most new developments that have been constructed in recent years have targeted upper-class customers, lowering prices for wealthier Americans but doing nothing to alleviate supply for standard units. The number of apartments added to the market was a 36-year high in 2023 but failed to effectively reduce shelter prices for average Americans, according to Realpage.

Shelter inflation in the United States remains a major issue as it stands at 5.7%.

Inflation for renters was 5.68% in March while inflation for homeowners was 5.65%.

The median national rent price for a single family home is nearly $2,000/month.

Meanwhile, the median payment… pic.twitter.com/V4UjOdWKbu

— The Kobeissi Letter (@KobeissiLetter) April 11, 2024

“The reason why higher interest rates haven’t slowed the rise of prices in shelter has to do with the ‘stickiness’ of prices in those areas,” Earle told the DCNF. “The commercial nature of rents and mortgages is that they are contractually agreed to. Monthly rents only change every year or two, and mortgage payments may not change for even longer periods of time. For that reason, price changes in those businesses are slow to materialize.”

Inflation overall increased to 3.5% year-over-year in March, rising from 3.2% in February and far higher than the Federal Reserve’s 2% target. In response to high inflation, the Fed has placed its federal funds rate in a range of 5.25% and 5.50%, the highest in 23 years, raising the cost of credit across the board.

See also  ‘Direction Of Travel Is Clear’: Powell Announces Intent To Shift Fed Policy As Concerns Over Jobs Market Surges

Due to an increase in the cost of credit, developers are currently disincentivized from obtaining capital to construct new homes, dampening new construction that could alleviate price pressures, according to Forbes Advisor. Existing homeowners are also disincentivized from selling their homes, as they would have to give up their current mortgage rate for possibly a much higher rate, further tightening supply, particularly for starter homes that Americans move out of as they get older.

Mortgage rates are particularly responsive to increases in the federal funds rate, tracking closely to Treasury yields that measure future rate expectations. The average for a 30-year mortgage neared 7% as of Thursday, rising from a recent low of below 3% at the start of 2021, according to Freddie Mac.

The Biden administration, in its budget proposal for fiscal year 2025, asked for $258 billion to boost housing supply and alleviate unaffordability. The plan could boost housing supply once the funds are actually appropriated, but it would add more fuel to inflation due to the need to fund the increase in spending with debt without addressing the key constraint of high interest rates on private developers who drive shelter creation.

“If there is one thing that we can hope to salvage from this ongoing inflationary ordeal, it’s the hope that some years from now, when some politician or bureaucrat recommends using money printing to address a problem, people remember that once that cat is out of the bag, it takes years to capture,” Earle told the DCNF.

The White House did not immediately respond to a request to comment from the Daily Caller News Foundation.

See also  Stocks moving big midday: WMT, CVS, WOLF

All content created by the Daily Caller News Foundation, an independent and nonpartisan newswire service, is available without charge to any legitimate news publisher that can provide a large audience. All republished articles must include our logo, our reporter’s byline and their DCNF affiliation. For any questions about our guidelines or partnering with us, please contact licensing@dailycallernewsfoundation.org.

Anytime big Dashing Hopes inflation Issue Reining Thorny
Share. Facebook Twitter Pinterest LinkedIn Tumblr Email

Related Posts

Trump Announces First Post-Tariff Trade Deal

May 8, 2025

Electric Vehicle Sales Nosedive As GOP Takes Buzzsaw To Biden’s Mandate

May 7, 2025

Tyson Foods Announces It Will Bend The Knee To Trump Admin’s New Rules

May 7, 2025

Federal Reserve Holds Interest Rates Steady Despite Pressure From Trump

May 7, 2025
Add A Comment

Leave A Reply Cancel Reply

Top Posts

Teens seeking addiction care unlikely to get standard medication

June 13, 2023

All The TV Shows And Movies Affected By The SAG Actors Strike (Updating)

July 14, 2023

Nepali Climber Makes Record, Climbs Mount Everest For 27th Time

May 17, 2023

How a U.S. debt default could impact your money

May 20, 2023
Don't Miss

Trump Announces First Post-Tariff Trade Deal

Business May 8, 2025

President Donald Trump announced Thursday the U.S. has reached a trade agreement with the U.K.,…

100 Funny Father’s Day Quotes for Hilariously Relatable Humor (and Plenty of Love Too)

May 8, 2025

Top 10 Benefits Of Acupuncture

May 8, 2025

Electric Vehicle Sales Nosedive As GOP Takes Buzzsaw To Biden’s Mandate

May 7, 2025
About
About

This is your World, Tech, Health, Entertainment and Sports website. We provide the latest breaking news straight from the News industry.

We're social. Connect with us:

Facebook Twitter Instagram Pinterest
Categories
  • Business (4,110)
  • Entertainment (4,220)
  • Finance (3,202)
  • Health (1,938)
  • Lifestyle (1,626)
  • Politics (3,084)
  • Sports (4,036)
  • Tech (2,006)
  • Uncategorized (4)
  • World (3,944)
Our Picks

Ford Reverses Plans to Drop AM Radios in Car, Truck, and SUV Models

May 25, 2023

‘So F*cked’: Big Dem Donor Realizes He ‘Was Totally Wrong’ About The Left’s Antisemitism

December 8, 2023

China should stick to ‘houses are for living, not for speculation’ – state media

August 23, 2023
Popular Posts

Trump Announces First Post-Tariff Trade Deal

May 8, 2025

100 Funny Father’s Day Quotes for Hilariously Relatable Humor (and Plenty of Love Too)

May 8, 2025

Top 10 Benefits Of Acupuncture

May 8, 2025
© 2025 Patriotnownews.com - All rights reserved.
  • Contact
  • Privacy Policy
  • Terms & Conditions

Type above and press Enter to search. Press Esc to cancel.