June marked the fourth straight month for inflation above an 8% rate as consumer prices soared to a 40-year high, according to NAHB Eye on Housing. June’s inflation rate constituted the largest year-over-year gain since November 1981 as both the energy and shelter index recorded their largest yearly increases since April 1980 and February 1991. The Consumer Price Index (CPI) rose 1.3% in June on a seasonally adjusted basis following an increase of 1.0% in May. The latest CPI jump marks the biggest monthly increase since September 2005.
Persistent gains could force the Federal Reserve to raise rates at an even more aggressive pace, and some experts believe a 75 basis point increase could be possible for the next round of rate hikes.
While the increase was broad-based, the indexes for gasoline, shelter, and food were the largest contributors to the increase in the headline CPI in June. After rising 3.9% in May, the energy index rose by 7.5% in June with the gasoline and natural gas index rising 11.2% and 8.2%, the largest monthly increase in natural gas index since October 2005. Meanwhile, both food and food at home index rose by 1.0% in June.
Other major component indexes also continued to rise in June. The indexes for shelter (+0.6%), used cars and trucks (1.6%), medical care (0.7%), motor vehicle insurance (1.9%) and new vehicles (0.7%).
Advertisement
Related Stories
Housing Policy + Finance
Even With Inflation Running Hot and Elevated Mortgage Rates, Buyer Demand Rises
Mortgage rates will likely stay high for the next few months, but that doesn't seem to be deterring homebuyers
Housing Policy + Finance
The Garden State Takes a New Approach to Expanding Affordable Housing
Recent legislation in New Jersey could provide inspiration for eliminating affordable housing hurdles in other places with strong housing markets
Housing Policy + Finance
Housing As Health Care: The Debate Continues
As more states channel Medicaid money into housing, the debate around whether states should use public health insurance money to provide housing is intensifying