Reported housing inflation lags market prices by many months.
Because of the mechanics alone, housing is likely to keep exerting upward pressure on the index into 2023, and there may come a point in the not so distant future when policy makers may decide to look past the housing element in the index.
But that can’t happen until market prices actually start to cool to a meaningful degree.
If the Fed stops tightening short of 2.5% — its idea of the neutral fed funds rate that’s neither stimulative nor restrictive — it could be remembered as a historic policy failure should prices surge anew or fail to come back to the Fed’s 2% target.
But the situation will be different in a few months.
Jonathan Levin Bloomberg 6 juli 2022
Capital Economics’ group chief economist Neil Shearing says don’t expect 2008-like housing-price drops.
That’s even as “in real terms global house prices are now running well above their long-run trend, and the recent surge in prices looks alarmingly similar to what happened in the run-up to the global financial crisis,” said Shearing in a note.
MarketWatch 5 July 2022
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