Home-sale prices rose 3.2% year-over-year during the four-week period ending November 6, and while more increases are discouraging for buyers already priced-out by record housing costs, the most recent gain is the smallest recorded since July 2020, Redfin reports. As demand levels off and homebuyers adjust to 7% mortgage rates, the overall inflation rate is beginning to slow, leading some housing experts to believe that the Fed could reduce its rate increase to 50 basis points next month.
Still, despite regional price drops and a growing share of homes selling below asking price, above average home prices are bolstering inflation and keeping home sales to a minimum even as the market cools.
“This morning’s report that the overall inflation rate is finally starting to back off makes it even more likely that the Fed will slow their rate increase to 50 basis points next month,” said Redfin Deputy Chief Economist Taylor Marr. “The inflation news is already helping to bring daily mortgage rates down. However, Chair Powell has indicated that inflation would need to slow for several consecutive months before the Fed would lower its target for how high it raises rates next year.”
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