Today the June 2023 Consumer Pricing Index report was released, and numbers have shown an overall larger improvement in inflation month over month. With yearly inflation falling to 3% we’re nearing the benchmark set by the Federal Reserve of 2% annual inflation. The Federal Reserve announced during their last meeting that although they would be pausing their rate increase for the month, they intended to increase rates an additional 2 times this year to reach their annual inflation benchmark. 

Today’s CPI report provided a more favorable outlook for the economy and inflation overall as numbers have improved better than analysts predicted. The stock and bond markets have both seen a favorable rise today with the DOW up 150 points earlier in the day on hopes that the FED rate hikes can be reduced with more favorable inflation data. 

One key takeaway from the CPI report is that shelter was the largest contributor to inflation in the month of June. According to the report, “The shelter index was the largest factor in the monthly increase in the index for all items less food and energy.” What this means is that although many sectors have slowed further, or reduced their overall index, shelter is still the largest contributor to inflation month over month. This can be felt by consumers as homes and rental rates have continued to rise in cost despite record high interest rates. 

In regard to housing in the Carolina’s, we have to consider both the data from the report and what is likely for the FED during their meeting at the end of the month. The FED has been exceptionally verbal of their intentions with interest rates despite their pause during their last meeting. Reports indicate that although the data is more promising than expected, the FED is still intending to raise rates twice before the end of the year. Although it is more hopeful that the increases could be limited to 1, the FED has yet to back down or announce plans to alter their course. 

Housing has held strong in our local Charlotte market thanks to the desirability and seasonality of the Carolina’s. Home buyers are still flocking here from our most northern and southern states in hopes to gain a better quality of life and a more temperate climate. This influx has maintained our housing values while also increasing rental rates for those looking to wait out the historically high rates. 

The unknown at this time is whether the additional rate hikes this year will even affect the Charlotte region. So far, the adverse effects were limited to just a few months at the end of 2022 as we’ve seen 3-6% equity growth undesirable markets in 2023. It’s anticipated that values will hold relatively well, possibly fluctuating a few percent +/-, but not be nearly as affected as what was predicted by economists at the end of last year. 

If you’re interested in discussing more, learning more about the markets in our area, buying, selling, or renting please don’t hesitate to reach out to me directly! 980-250-2795