Many components of inflation have eased over the past year, while housing costs have continued to accelerate. However, there are good reasons to expect that to change over the coming months.
Falling Inflation
Inflation has been among the most closely watched economic variables over the past 2 years and has driven an aggressive increase in interest rates from the Federal Reserve. Recently, annual inflation has fallen from an peak of 9% during summer 2022 to 5% today. However, where inflation trends from here will likely be driven by housing costs. That’s because housing costs make up almost 60% of the Consumer Price Index and are rising at an 8.2% annual rate, according to the March 2023 CPI figures.
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