Has Housing Supply Become the Tail That Wags the Inflation Dog?
The housing shortage refuses to stay in its lane.
Depressed inventory levels have already put a beating on the homeownership dreams of millions of Americans. Our read on the most recent inflation data suggests the shortage is now driving inflation higher - and your 401(k) lower.
You read that right…
Housing supply in the United States has been declining and disconnected from demand for over a decade. That’s why less than 1% of homes are for sale. With so many homeowners electing to stay in place, scarce inventory inflates home prices and associated shelter costs (mortgage payments, rent, property taxes, etc.) which comprise about a third of the CPI.
Per Tuesday's report from the U.S. Bureau of Labor Statistics, August saw the largest month-over-month increase in cost of shelter since January 1991. That’s why headline consumer prices rose unexpectedly, and the stock market reacted negatively.
The Federal Reserve now has little choice but to hike interest rates another 75 points at its September policy meeting and perhaps at its November meeting as well. With so many equity investors unwilling to fight the Fed, U.S. stocks plummeted as market participants digested the full report.
Forcing homebuyers to the sidelines is one thing, but the wildly imbalanced U.S. housing market’s role in the weakening of our economy has now reached levels unseen since the financial crisis of 2008. The problem stems from insufficient inventory this time around, which is why Bluebid Homes can play a big role in uncovering dormant, yet desirable, housing supply.
Homeowners are able to combat uncertainty by privately testing the market with Bluebid. By claiming your home, you become eligible to receive confidential offers from interested buyers without the hassle, risk, and loss or privacy that accompany putting your home on the market.
New inventory and greater opportunities for all.