The government tracks inflation a few different ways. One of them is the Personal Consumption Expenditures Price Index, or PCE, which measures how much more or less people are paying for goods and services compared to a year ago. The PCE has jumped since February, driven largely by overseas conflict pushing gas and energy prices higher.
There is a second measure called core PCE that leaves out gas and energy, and the Federal Reserve watches it closely. The encouraging part is that core PCE is rising, but not nearly as fast as the overall number. That tells us a lot of the recent spike ties directly to events abroad that may settle down over time.
When inflation runs high, the Federal Reserve tends to keep interest rates elevated to cool things off. Right now the odds of another rate move before the end of the year are close to a coin flip. In plain terms, mortgage rates are probably not coming down as fast as a lot of people were hoping.
As Bankrate put it, until there is a resolution to the conflict overseas, look for both inflation and mortgage rates to stay high.
It is easy to hear the word inflation and feel uneasy, but today's housing market looks very different from 2008:
High rates do not mean you are stuck. A few smart moves can help:
The bottom line is that strategy matters more than trying to time the market perfectly. If you want to talk through what this means for your move, we are always happy to help.
