You pretty much nailed it. The end of record low mortgage rates signals an end of the free money era.
One of the hosts on WCCO brought up an interesting point. We’re now at a point where people just can’t afford the prices of homes and they’re facing a difficult decision between waiting for housing prices to come down and paying a higher interest rate or locking into something now that doesn’t fit what they need either today or in the future.
They also brought up something else that struck me. There’s a big crunch in starter homes now, even among people who wouldn’t normally be looking at one. People can’t afford that second home because of prices and they might not be able to afford it in the future with rising inflation and interest rates. So people trying to get out of that middle tier home are struggling to sell in some markets. So there’s an interesting thing going on with prices.
Regarding CPI, I’ve never understood why gas and staples aren’t included in CPI. Yes, they might be more volatile, but I think they reflect the true inflationary pressures in the economy.
