Consumer inflation data was mixed in November as the headline number inched higher but the devil is in the details. The Consumer Price Index (CPI) rose 0.1% in November from 0.0% in October while the year-over-year number fell to 3.1% from 3.2%. The numbers showed that shelter and food costs continued to rise with energy prices declining. Shelter costs accounted for nearly 70% of the total increase in the core number, which excludes food and energy index.
The takeaway... housing prices as well as home borrowing costs need to decline to get to a more normal environment. With the Fed at the end of its rate hiking cycle, Redfin predicts home prices will decline modestly in 2024, listings will increase, and borrowing costs will fall modestly.
