They now make up a third of the Consumer Price Index (CPI), and while housing price growth slowed, inflation in the sector still increased, contributing to nearly 40% of the overall rise in November.<\/p>\n
This poses a major obstacle for President Trump\u2019s economic agenda, as housing costs stand in the way of reaching the Federal Reserve\u2019s 2% inflation target. Although rents are decreasing, the pace isn’t enough<\/a> <\/strong>to curb the overall inflation. On top of this, the housing supply remains constrained, still 17% below pre-pandemic levels, while demand persists, keeping prices elevated.<\/p>\n Mortgage rates have further compounded the issue, making homes less affordable. Rents have surged by 30% in the last four years, and October saw a 3.3% year-over-year increase in the average rent. Despite rate cuts by the Federal Reserve, mortgage rates have continued to climb, intensifying the affordability crisis.<\/p>\n