“The U.S. Consumer Price Index for April provided insight into one reason why the housing market is so quiet. While home prices have been showing steady erosion so far this year, as recorded by the S&P Case-Shiller index, the price level for a basket of consumer goods has been rising. April’s Consumer Price Index climbed to +3.2% year over year from +2.7% in March.
The “core” rate, which excludes energy and food, may have still been restrained at +1.3%, but people do have to eat, travel and stay warm (or cool, depending on the time of year). The food sub-index was +3.2% and energy came in at +19.0%. The all-important year-over-year change in the price of gasoline was +33.1%. That makes it a lot more expensive to drive to work or out shopping or to the entertainment district for a night of fun. People start watching their pennies.” Read more.
“Partly Caused by Inflation, US Home Starts Stumbled in April”
Reed Construction Data, May 17, 2011.
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