New home sales surged 20% in May, defying many experts' predictions. Here's why the Fed may be happy.
The volume of US new home sales jumped in May – and that could, surprisingly, be good news for the Federal Reserve. US Census Bureau
The surge in sales was a big surprise. The Federal Reserve's aggressive hikes to interest rates since last spring have driven up mortgage rates, making homes less affordable to potential buyers, and homeowners loath to sell and give up their low-cost, fixed-rate mortgages. That could be music to the Fed's ears, as falling house prices could mean overall inflation is waning. While the Consumer Price Index , the inflation benchmark, accounts for shelter costs using owner-equivalent rent instead of home prices, declining home prices are likely to put downward pressure on the index over time.
If home sales are up as a result of prices going down, that could give the Fed the green light to ease off in fighting inflation, which could reduce the the risk of a. Higher interest rates encourage saving over spending and raise borrowing costs, which can deter hiring and reduce consumption and investment, leading to an economic downturn.
South Africa Latest News, South Africa Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Dogwoof Takes International Sales Rights On Ukrainian War Doc ‘20 Days In Mariupol’EXCLUSIVE: London-based documentary specialist Dogwoof has acquired international sales rights to Mstyslav Chernov’s documentary feature 20 Days in Mariupol following its award-winning bow at Sheff…
Read more »
California hate crimes jumped 20% in 2022: reportReported hate crimes against Black residents and hate crimes based on sexual orientation were up by nearly 30% year over year, according to the report.
Read more »
The 20 Best Linen Dresses an Editor Swears By for SummerStay cool, look hot.
Read more »
'The Bachelorette' Season 20 premiere had a few surprises | CNNChairty Lawson’s hunt for a husband has begun.
Read more »
Malaria Is Spreading in the US: First Time in 20 YearsThe federal health agency issued a nationwide warning on Monday to health providers and officials to be on the lookout for symptoms of the potentially fatal illness.
Read more »