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Inflation rises as gas prices and housing costs tick up, leaving Americans concerned
The gasoline and shelter indexes both rose in February. (iStock)
Inflation is up yet again, largely due to rising gas prices and housing costs. For the last 12 months, the Consumer Price Index (CPI) for all items increased by 3.2%, the U.S. Bureau of Labor Statistics reported. This is up slightly from the 3.1% increase last month.
On a monthly basis, CPI increased 0.4 percentage points in February. This increase comes after the index rose by 0.3 percentage points in January.
The shelter index and gasoline index are responsible for most of February’s CPI increase. Combined, they account for 60% of the monthly increase. The shelter index rose by 0.4% while the gasoline index rose by 3.8% in February.
The energy index as a whole also rose in February, by 2.3 percentage points. In January, it had declined by 0.9 points. This is largely due to rising gas prices, which averaged $3.17 last week.
As certain indexes rise, this leaves the Fed uncertain about whether to make the rate cuts they initially promised.
“While we do not expect the trend in inflation to re-accelerate this year, less clear progress over the next few months is likely to keep the Fed searching for more confidence that inflation is on course to return to target on a sustained basis,” Sarah House, a senior economist at Wells Fargo, said.
Other indexes remained unchanged last month while just a few declined. The food index, for example, held steady after rising 0.4% in January. The new vehicle index decreased slightly by 0.1%, as did the medical care services index.
High inflation often causes debts to rise, but you can start tackling your debt today by taking out a low interest personal loan. When it comes to personal loan shopping, Credible can do the heavy lifting for you. With the click of a button, you can view multiple lenders, rates, and terms in one spot.
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Mortgage rates are still close to 7%
Inflation and mortgage rates are closely linked, which is why, despite lowering slightly last week, they’re still hovering close to 7%.
As of March 7th, 30-year mortgage rates averaged 6.88%, according to Freddie Mac. This is down from the end of February when rates averaged 6.94%. The current average is still higher than it was last year at this time, when rates were 6.73%, on average.
“Things are getting a little bit more healthy. It’s still a seller’s market, not a buyer’s market. There’s more buyers than there are sellers,” Lance Evans, a member of the Jefferson-Lewis Board of Realtors, said.
Many buyers are holding steady, waiting for interest rates to drop. In 2023, 4.8 million homes were sold, which is the lowest number since 2011, according to Freddie Mac. This decline mostly revolved around existing home sales, as about 4.1 million existing homes were sold, a 30-year low.
The rate-lock effect caused sellers to hold onto their homes, leaving buyers scrambling for new-build properties.
As interest rates continue to drop, you may want to take advantage and start looking for a mortgage now. You can visit an online mortgage broker like Credible to compare rates, choose your loan term, and get preapproved by multiple lenders.
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Consumer confidence falters as recession fears spark up again
Despite economic data signaling a healthy U.S. economy, many Americans aren’t so sure. The Conference Board, which researches the current consumer mindset around the economy, reported that its consumer confidence index fell from 110.9 in January to 106.7 in February.
The Conference Board’s index had improved in recent months, but it took a dip last month as consumers once again worried about a recession.
The index that measures the short-term expectations for income and job growth also fell to 79.8 from 81.5 back in January. A score under 80 tends to signal an upcoming recession.
“In the case of jobs, the market is still strong, it’s just much less strong than a year ago when job swapping for higher pay was easy,” said Robert Frick, an economist at the Navy Federal Credit Union.
“And now the contentious election season is coming closer into view, and national elections strongly influence perceptions of the economy.”
If you’re struggling to deal with high costs and debt, a personal loan can help you pay off debt more quickly by offering a lower interest rate. Use an online marketplace like Credible to make sure you’re getting the best rate and lender for your needs.
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As we look ahead to 2024, many homeowners and prospective buyers are wondering what to expect when it comes to mortgage rates. The landscape of the housing market is constantly changing, so it’s important to stay informed about trends and predictions. In this blog post, we will discuss some factors that could impact mortgage rates in 2024 and what homeowners and buyers can expect.
One factor that could impact mortgage rates in 2024 is the overall state of the economy. If the economy is strong and growing, we may see higher mortgage rates as the Federal Reserve looks to combat inflation. On the other hand, if the economy is stagnant or in a recession, we may see lower mortgage rates as the Fed looks to stimulate growth. It’s important to keep an eye on economic indicators such as GDP growth, unemployment rates, and inflation to get a sense of where mortgage rates may be heading.
Another factor that could impact mortgage rates in 2024 is Federal Reserve policy. The Fed plays a key role in setting interest rates, and their decisions can have a ripple effect on mortgage rates. If the Fed decides to raise interest rates in response to inflation, we may see an increase in mortgage rates. Conversely, if the Fed decides to lower interest rates to stimulate growth, we may see a decrease in mortgage rates. Keeping up with the latest news and announcements from the Fed can give homeowners and buyers a sense of where mortgage rates may be heading.
In terms of specific cities and local mortgage companies, it’s important to note that mortgage rates can vary depending on location and lender. For example, in a city like New York City, where real estate prices are high, mortgage rates may be higher compared to a city like Indianapolis, where real estate prices are lower. Additionally, local mortgage companies may offer competitive rates and terms compared to national lenders. For example, in New York City, local lenders like Quontic Bank and CrossCountry Mortgage may offer specialized products and services tailored to the needs of local buyers.
It’s important for homeowners and buyers to shop around and compare rates from multiple lenders to ensure they are getting the best deal. Websites like Bankrate and LendingTree can be helpful resources for comparing rates and terms from multiple lenders. Homeowners and buyers should also consider working with a mortgage broker who can help them navigate the lending process and find the best mortgage product for their needs.
In conclusion, predicting mortgage rates in 2024 is not an exact science, but there are several factors that could impact rates. By staying informed about economic indicators, Federal Reserve policy, and local market trends, homeowners and buyers can make informed decisions about their mortgage. Shopping around and comparing rates from multiple lenders is key to ensuring you are getting the best deal on your mortgage. Whether you’re looking to refinance your existing mortgage or buy a new home, it’s important to stay informed and be proactive in managing your mortgage.
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