Inflation is rising at its fastest pace in 40 years following an 8.5% increase in March, causing a growing number of buyers to look for a home that is $40,000 less than their initial price points, The National Association of Realtors reports. Prices for energy services and commodities rose at a steep pace of 32%, while used and new vehicle sales accounted for 22% of consumer spending.
Prices of food items rose 8.8% across the U.S., and cost of shelter also rose 5%, leaving prospective buyers with little wiggle room when determining their housing budgets.
Excluding the cost of shelter, the average consumer is spending an additional $429 monthly for items other than shelter. Meanwhile, average weekly wages rose just $212 per month, so the consumer is short by $217 per month.
If we take the present value by applying a mortgage rate of 4.72% over 30 years, this means that the average consumer will be looking for a home that is $41,793 cheaper.
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