Return to the '70s? Today's housing market has echoes of dark era

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Housing Market,Mark Fleming,Claudia Sahm

Economists comment on the state of housing as homebuyers face high rates and borrowing costs this spring.

These conditions were hallmarks of the 1970s when inflation ran high, leading the Federal Reserve to hike interest rates. The central bank’s measures to tame inflation drove up borrowing costs for real estate developers and ultimately shrunk homebuyers' purchasing power.

Overall, new construction accounted for one-third of the inventory on the market that month — well above the 12% average, according to data provided by the While, yes, housing inflation is still running hotter than expected — it has also come a long way in the last couple of months.over the past year, according to the latest CPI, but were down from their peak of 8% in March 2023.

“Spending is good, incomes are good, job markets are expanding at a good rate. That means more paychecks, more incomes, more spending,” said Frick. “I don’t have any worries about the economy.”

 

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