Recent data from the Consumer Price Index (CPI) indicates a 2.3% annual rise in inflation, the lowest since February 2021, raising concerns about potential tariffs from Trump's administration impacting future inflation rates. Realtor.com Senior Economist Jake Krimmel highlights high economic uncertainty influencing mortgage rates and housing activity, which may remain dampened until borrowing costs decrease. Shelter costs, notably housing and rent prices, continue to increase, suggesting a persistent strain on affordability. Anticipation is building for the next CPI report amid changes in tariff policies, particularly concerning trade with China.
While the numbers reflect expectations for the index from economists, Trump's on again, off again tariffs could still push inflation up in the coming months.
Economic uncertainty remains high, said Realtor.com Senior Economist Jake Krimmel in a statement.
Uncertainty around how trade policy will impact future inflation, consumer sentiment and job growth has muddied the outlook for Fed rate cuts.
Until borrowing costs fall meaningfully, housing activity is likely to remain subdued, even as underlying demand and supply slowly improve.
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