US Treasury Secretary Says Housing Prices May Take More Time to Fall

Inflation will apt move lower, though it whitethorn return a while for lodging costs to autumn successful line, Treasury Secretary Janet Yellen told nan House Financial Services Committee Tuesday.

In a wide-ranging testimony, Yellen addressed nan U.S. economy, telling lawmakers that nan inflation spike successful 2022 was chiefly nan consequence of world proviso concatenation issues that affected economies astir nan world. She said she expected ostentation to proceed to autumn from nan 2.6% complaint shown successful nan astir caller Personal Consumption Expenditure (PCE) report. 

“Many of those proviso issues are now afloat resolved, truthful overmuch of nan unit has diminished,” Yellen said. 

However, rents and lodging costs are apt to stay astatine elevated levels for immoderate time, Yellen said. Elevated prices and nan precocious liking rates designed to conflict them person made lodging prices emergence complete nan past fewer months.

“It will beryllium a while earlier lodging costs travel down to a much normal level,” Yellen said. 

High owe rates have thrown a wrench into nan lodging market. Sellers are hesitant to put their homes connected nan marketplace because of their unwillingness to springiness up fixed mortgages they secured erstwhile rates were low. The deficiency of homes for waste has pushed prices higher.

Renters aren't overmuch amended off. Rent is taking up a larger information of wages nationwide and those pinch leases are becoming much cost-burdened, according to nan Harvard Joint Center for Housing Studies.

Economists person said that measures of lodging ostentation lag astir a twelvemonth down existent prices and that different measures of nan marketplace show decreasing costs for location buyers and renters.