Florida ranked No. 3 as the most stable housing market in the U.S., according to an analysis by CNBC that weighed each state’s economic health, annual home price appreciation, new construction per year, and foreclosures and insolvency from the beginning of 2022. Rising prices and rates of construction still reflect strong demand for the state as we are seeing gradual signs of housing inventory recovery.
The consumer price index (CPI) rose 9.1% from 2021, which is the largest gain since the end of 1981, according to data from the Bureau of Labor Statistics. The widely observed inflation gauge increased 1.3% from June, the most since 2005, reflecting higher gasoline, food and housing costs.
More specifically, housing costs for homeowners rose 5.5% over the past year and saw a 0.7% increase from May to June alone. Over both periods, the bureau reported the fastest escalation in homeownership costs since 1990. This change was one of the biggest factors placing an increasing strain on family budgets.
Inflation has hit the hardest in America’s hottest migration destinations. This is amounting to double-digit losses in purchasing power for residents of some of the country’s most popular places to move. Tampa, the metro with the second-highest net migration inflow, saw prices rise by 10.6%.
“A place’s popularity has a big impact on how much its local prices go up,” said Redfin Deputy Chief Economist Taylor Marr. “An influx of people moving into a place like Phoenix or Tampa pushes up demand for everything from housing to food to fuel, which pushes up prices in all those areas and ultimately contributes to overall inflation.”
From a global perspective, the aggressive U.S. rate hikes have boosted the dollar’s appeal and has sent investors flocking to the dollar as global recession fears grow. Last week, the euro dropped below parity against the dollar for the first time in almost 20 years. Some global banks are forecasting a recession for Europe by the end of Q3 of 2022.
With these factors in mind, next Wednesday, July 27, from noon – 1 p.m., NAR will hold its virtual Real Estate Forecast Summit: Residential Update event, which will provide an outlook on the residential market. The discussion will also include consideration of international activity in the residential market. I encourage everyone to attend this event and gain a valuable outlook on the current factors affecting the housing market.