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What will happen to home prices if inflation stays high? Here’s what some experts think

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Stubborn inflation could cause home prices to rise further, according to some experts.

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The unemployment rate remains low at 3.9%, according to the Bureau of Labor Statistics. On the flip side, inflation is at 3.50% — 1.50% higher than the Federal Reserve’s target rate. Rates for car loans and mortgages are much higher than they were a few years ago, too.

Because of this, some homebuyers are finding it more difficult to afford a home since the average 30-year mortgage rates are over 7%. If you want to purchase a home, you may wonder whether you should wait for rates to drop. However, you should be aware of what could happen if inflation rates remain high.

See what mortgage rate you could secure here now.

What will happen to home prices if inflation stays high? 

Here’s what can happen to home prices if inflation remains elevated, according to the experts we consulted.

Home prices could rise 

“Higher inflation means higher mortgage rates, which in turn means lower housing affordability conditions,” says Robert Diez, Chief Economist at National Association of Home Builders. NAHB “research finds that at today’s mortgage rates, and today’s home prices and household income levels, only a quarter of American households can afford a typical home.”

Diez isn’t the only economist who thinks home prices could remain elevated. Brad Dillman, Chief Economist at RPM Living, an investment and management company, believes a lack of inventory is driving up prices.

“Today, home prices are increasing in part because there is relatively little listed inventory, which has greatly benefitted new home builders,” Dillman says, adding that “if this trend continues, we can expect new single-family home construction to remain relatively elevated.”

Brian Durham, Vice President of Risk Management and Managing Broker at Realty Group LLC and Realty Group Premiere, thinks home prices could rise if mortgage rates fall.

“The most significant price increases will happen again if and when mortgage rates come back down and millions more homebuyers come off the sidelines and back into the market,” notes Durham. “Unless the supply of homes increases significantly you can expect prices to continue increasing, barring something bad happening to the economy.”

Lock in a mortgage rate before home prices rise further here now.

Home prices could remain flat

Dillman also believes there could be a scenario where home prices remain flat because renting is more affordable in some areas. 

“Weakness in multifamily rentals today may serve to siphon demand from the for-purchase space because renting is more affordable in today’s real estate market [than buying a home],” says Dillman. “With rents down year over year in many large traditionally affordable markets, this is becoming more common.”

Home prices could fall

Dillman also said that home prices could fall despite high inflation – if the economy suffers major job losses.

“Significant job losses, particularly among full-time workers, could cause an increase in mortgage defaults and serve to reduce marginal demand,” says Dillman. “The oversupply of new homes, coupled with an uptick in existing homes for sale, may cause a market that has been rising on little volume (home sale transactions) to experience a decline in home prices.”

The bottom line

It’s challenging to predict what will happen to home prices if inflation remains high. “The housing market is complex enough that even a Federal Reserve rate cut wouldn’t have a known impact on housing prices,” says Christopher Flis, a certified financial planner and President of Resilient Asset Management.

Regardless of whether inflation leads to higher or lower home costs, it’s crucial to review your budget so that you can buy a home you can afford. To increase your chances of qualifying for the best mortgage rate for your situation, shop around with at least three to five lenders. Also, keep in mind that even if you buy a home today with a relatively high mortgage rate, you can also refinance later if rates drop.



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Transcript: Sen. Mark Kelly on “Face the Nation with Margaret Brennan,” Oct. 6, 2024

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The following is a transcript of an interview with Sen. Mark Kelly, Democrat of Arizona, on “Face the Nation with Margaret Brennan” that aired on Oct. 6, 2024.


MARGARET BRENNAN: Joining us now is Arizona’s Democratic Senator, Mark Kelly. He’s in Detroit this morning on the campaign trail for the Harris campaign. Good morning to you, Senator.

SEN. MARK KELLY: Good morning, Margaret.

MARGARET BRENNAN: I want to talk to you about Arizona, but let’s start in Michigan, which is where you are right now. And it is going to be such a key state to a potential Harris or Trump victory. Vice President Harris is facing challenges among black men, working class people, as well as the Muslim and Arab populations skeptical of the White House support for Israel’s wars. What are you hearing on the ground there from voters?

SEN. KELLY: Well, my wife, Gabby Giffords, and I have been out here for a couple days. We’ve been campaigning across the country, Michigan, I’ve been in North Carolina, Georgia as well. I’ll be back to Arizona here soon. The vice president was out here speaking to Muslim organizations and the Arab community about what is at stake in this election and addressing the concerns that they have. What we’re hearing, issues about the economy, about gun violence, about, you know, supporting American families and the difference between Donald Trump and Kamala Harris. You know, Kamala Harris, who has a vision for the future of this country, Donald Trump, who just wants to drag us backwards.

MARGARET BRENNAN: Today in Dearborn, Michigan, there’s a funeral service for an American man who was killed in Lebanon by an Israeli airstrike. It just underscores how that community you’re talking about out in Michigan feel some of what’s happening in a personal way to their community. Given how close this race is, do you think this war and the expectation it could escalate could cost Democrats both a seat in the Senate and potentially the presidency?

SEN. KELLY: Margaret, nobody wants to see escalation and it’s tragic when any innocent person, whether it’s an American or Palestinian, lose their life in a conflict. Tomorrow’s one year since October 7th, when Israel was violently attacked. Israel has a right to defend itself, not only from Hamas, but from Hezbollah and from the Iranians. But, you know, I and my wife, you know, we feel for the community here who’s been affected by this. And that’s why the vice president was out here earlier, a few days ago, meeting with that community. 

MARGARET BRENNAN: But it’s a live issue.

SEN. KELLY: Yeah, sure. I mean, there is an ongoing conflict in the Middle East. Israel is, you know, fighting a war now on, I think it’s fair to say, two fronts and then being attacked by the Iranians as well. And, they- they need to defend themselves, and we need to support our Israeli ally. At the same time, when women and children lose their life, innocent people in a conflict, it is- it is tragic.

MARGARET BRENNAN: You do sit on the Senate Intelligence Committee and so I know you know how intense the efforts are by foreign actors to try to manipulate voters going into November. Just this Friday, Matthew Olsen, the lead on election threats at the Department of Justice, told CBS the Russians are, quote, highlighting immigration as a wedge issue. That is such a key issue in Arizona. Are you seeing targeted information operations really focusing in on Arizonans right now?

SEN. KELLY: Not only in Arizona, in other battleground states. It’s the Russians, the Chinese, the Iranians, and it’s significant. And we need to do a better job getting the message out to the American people that there is a huge amount of misinformation. If you’re looking at stuff on Twitter, on TikTok, on Facebook, on Instagram, and it’s political in nature, and you may- might think that that person responding to that political article or who made that meme up is an American. It could be- it could look like a U.S. service member. There is a very reasonable chance I would put it in the 20 to 30% range, that the content you are seeing, the comments you are seeing, are coming from one of those three countries: Russia, Iran, China. We had a hearing recently, with the FBI director, the DNI, and the head of the National Security Agency. And we talked about this. And we talked about getting the word out. And it’s up to us, so thank you for asking me the question, because it’s up to us, the people who serve in Congress and the White House to get the information out there, that there is a tremendous amount of misinformation in this election, and it’s not going to stop on November 5th.

MARGARET BRENNAN: Understood. And we will do our best to help parse that for viewers. But on the topic of the border, President Biden did announce just this past week new regulations to keep in place that partial asylum ban that he rolled out back in June. That’s what’s credited with helping to bring down some of the border crossing numbers in recent weeks. It was supposed to be a temporary policy, dependent on how many people were crossing at a time. Do you think this is the right long term policy, or is this just a gimmick to bring down numbers ahead of the election?

SEN. KELLY: Well, the right long term policy is to do this through legislation. And we were a day or two away from doing that, passing strong border security legislation supported by the vice president, negotiated by the vice president, and the president and his Department of Homeland Security, with Democrats and Republicans– 

MARGARET BRENNAN: But this is not legislation. 

SEN. KELLY: –This is bipartisan. This isn’t. But the legislation was killed by Donald Trump. We were really close to getting it passed. That’s the correct way to do this. When you can’t do that, Margaret, when a former president interrupts the legislative process the way he did, which is the most hypocritical thing I’ve ever seen in my three and a half years in the Senate. After that happened, the only other option is executive actions. And this has gone from what was chaos and a crisis at our southern border to somewhat manageable. And if you’re the border- Border Patrol, you know, this is this- you need this. I mean, otherwise it is unsafe for Border Patrol agents, for CBP officers, for migrants, for communities in southern Arizona. So it’s unfortunate that this was the- these were the steps that had to be taken. 

MARGARET BRENNAN: Okay.

SEN. KELLY: But that’s because the former president didn’t allow us to do this through legislation. 

MARGARET BRENNAN: Senator, we have to leave it right there. Face the Nation will be right back.



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10/6: Sunday Morning – CBS News

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10/6: Sunday Morning – CBS News


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Hosted by Jane Pauley. In our cover story, Robert Costa talks with election officials about threats to your right to vote. Plus: Tracy Smith talks with pop music icon Sabrina Carpenter; Ben Mankiewicz sits down with “Matlock” star Kathy Bates; Kelefa Sanneh interviews pop star and Louis Vuitton’s creative director of its men’s collection Pharrell Williams; Dr. Jon LaPook goes behind the scenes of Delia Ephron’s new Broadway play, “Left on Tenth”; Lee Cowan reports on a young autistic man’s creation of a six-movement symphony; and Seth Doane explores how the National Library of Israel and the Palestinian Museum are collecting artwork and other materials documenting the October 7th Hamas attack and its aftermath.

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Sen. Mark Kelly says Americans need to know about “huge amount of misinformation” on election

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Sen. Mark Kelly says Americans need to know about “huge amount of misinformation” on election – CBS News


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In the wake of the Department of Justice warning that Russians are using immigration as a wedge issue for American voters, Sen. Mark Kelly tells “Face the Nation” with Margaret Brennan that “we need to do a better job getting the message out there that there is a huge amount of misinformation” as Election Day approaches.

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