{"id":2256,"date":"2025-08-13T05:56:41","date_gmt":"2025-08-13T05:56:41","guid":{"rendered":"https:\/\/ft365.org\/index.php\/2025\/08\/13\/the-housing-market-and-inflation-bankrate\/"},"modified":"2025-08-13T05:56:41","modified_gmt":"2025-08-13T05:56:41","slug":"the-housing-market-and-inflation-bankrate","status":"publish","type":"post","link":"http:\/\/ft365.org\/index.php\/2025\/08\/13\/the-housing-market-and-inflation-bankrate\/","title":{"rendered":"The Housing Market And Inflation | Bankrate"},"content":{"rendered":"
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Inflation remains a stubborn foe, according to new consumer price index (CPI) data. Over the past year, the all items index increased 2.7 percent before seasonal adjustment, according to July figures from the U.S. Bureau of Labor Statistics, released Aug. 12. This is unchanged from the June reading of 2.7 percent, and it\u2019s still above the Federal Reserve\u2019s stated goal of 2 percent \u2014 however, it\u2019s significantly lower than the 9.1 percent peak in 2022.<\/p>\n

In response to slowing inflation and weakening jobs data, the Federal Reserve cut rates at its final three meetings of 2024 \u2014 by half a percentage point in September and another quarter point in both November and December \u2014 but has held steady in all its 2025 meetings so far. The next meeting takes place Sept. 16-17.<\/p>\n

The shelter category of the CPI, which includes housing costs, remains a stubbornly large contributor to inflation overall. In July, shelter increased 0.2 percent month-over-month and was once again the primary factor in the overall increase. It has increased 3.7 percent in the past 12 months. While home-price growth may be slowing, Americans are still reeling from the extreme housing cost run-up of the past few years.<\/p>\n

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There’s no dismissing the fact that housing affordability continues to be a major pain point for Americans.<\/q> \u2014 Mark Hamrick, Bankrate Senior Economic Analyst <\/cite> <\/p><\/blockquote><\/div>\n

\u201cShelter continues to be a contributor to the rise in the main gauge of prices at the retail level,\u201d says Mark Hamrick, Bankrate\u2019s senior economic analyst. \u201cThere is reason for optimism on this front if home-price gains moderate as expected. But having said that, there\u2019s no dismissing the fact that housing affordability continues to be a major pain point for Americans.\u201d<\/p>\n

\u201cThe jumbo heavyweight of inflation is housing costs,\u201d said Lawrence Yun, chief economist for the National Association of Realtors (NAR), in a recent statement. \u201cGetting shelter costs under control with more housing supply will be the key to getting overall inflation fully tamed and for the Federal Reserve to \u2018normalize.\u2019 Fed rate cuts with high inflation will not result in lower mortgage rates. However, rate cuts because of falling inflation will mean meaningfully lower mortgage rates.\u201d<\/p>\n

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The jumbo heavyweight of inflation is housing costs.<\/q> \u2014 Lawrence Yun, Chief Economist, National Association of Realtors <\/cite> <\/p><\/blockquote><\/div>\n

Nationally, Cotality\u2019s most recent home-price analysis reports that prices dipped to 1.7 percent from June 2024 to June 2025. It forecasts that price growth will continue, though, with an increase of 3.7 percent by June 2026. \u201cSlowing price growth and increased for-sale inventories are gradually improving affordability, which has recently been at its lowest levels in more than 30 years,\u201d said Cotality chief economist Selma Hepp in a statement. \u201cThese changes are creating new opportunities for potential homebuyers who were previously unable to enter the market due to high prices. But, the extent to which buyers can enter the market is influenced by the stability of the labor market and the absence of major layoffs.\u201d<\/p>\n

Fannie Mae\u2019s Home Purchase Sentiment Index, meanwhile, rose by 2 points in July to 71.8. The survey found that 77 percent of consumers said that now is a bad time to buy a home.<\/p>\n

What it means for buyers and sellers<\/h2>\n

Among these decidedly mixed signals, should you buy a home now, or wait? What about selling your home now?<\/p>\n

For homebuyers<\/h3>\n

Housing inventory, while improving significantly, remains tight for potential buyers across the country. According to the most recent existing-home sales data from NAR, the country had a 4.7-month supply of inventory in June, not bad but still below the 5 to 6 months needed for a balanced market. June\u2019s supply of new construction single-family homes was a different story though, nearing 10 months, according HUD and the Census Bureau.<\/p>\n

In addition, home prices continue to rise, with NAR\u2019s median existing-home sale price in June at $435,300, up 2 percent year-over-year \u2014 an all-time record representing 24 consecutive months of annual growth.<\/p>\n

It\u2019s OK to wait things out instead of buying now to beat further increases, especially if you\u2019re a first-time homebuyer. While you\u2019d be putting off building equity, you might find you\u2019re in a better position to buy in the future, as the market cools and your income can potentially grow.<\/p>\n

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Even when inflation does come down on a consistent basis, it doesn\u2019t mean prices falling; it just means prices not rising as fast.<\/q> \u2014 Greg McBride, Bankrate Chief Financial Analyst <\/cite> <\/p><\/blockquote><\/div>\n

\u201cEven when inflation does come down on a consistent basis, it doesn\u2019t mean prices falling; it just means prices not rising as fast,\u201d says Greg McBride, Bankrate\u2019s chief financial analyst. \u201cFor homebuyers, a more modest pace of appreciation, or even a period of stagnant home prices, can allow for incomes to grow further. Rather than stretching too much now, you may be able to buy a bit more comfortably in a couple of years if your income growth outpaces home price growth. But there are no guarantees.\u201d<\/p>\n

That said, life circumstances might require you to buy a home now, regardless of market trends, and that\u2019s as good a reason as any. Just make sure you plan to stay in the home for long enough to come out ahead when you eventually sell.<\/p>\n

For home sellers<\/h3>\n

The continued growth in home prices, ever upward, may provide an opportunity for sellers to get an appealing price for their homes. This is good news, but keep in mind that if you then need to buy a new home, the tables will turn, and you\u2019ll be subject to the same circumstances \u2014 and high mortgage rates \u2014 as other buyers.<\/p>\n

And remember, location matters. While median sale prices overall are quite high, not every location is experiencing the same level of price growth. Home prices are falling in parts of Florida and Texas, while they\u2019re still rising in pockets of the Midwest and Northeast. So, depending on where you live, the local market could be cooler or hotter than average.<\/p>\n

Homebuying tips when prices are high<\/h2>\n

If you\u2019re set on buying soon, here are a few ways you can stretch your housing budget:<\/p>\n