We saw another week of mostly losses in the stock market, which is unsuitable for anyone. Inflation continues to keep prices high and causes everyone to dig further into their pockets to pay for everyday expenses. The Federal Reserve continues to battle reducing inflation and not send the economy into a recession. This is a difficult task, and changes don’t happen overnight. We’ve already since interest rates rise, and we can likely expect them to increase by the end of summer, probably a 0.5 percent.
Another sign of uncertain times is new mortgage applications. We’re down nearly 10%, which shows that rising interest rates and high home prices are starting to weigh heavily on people. This was coupled with new home sales decreasing, which has caused many families to relook their financial and living situations. It’s too soon to say that the decrease in new mortgage applications will significantly decrease home prices. Still, I believe the housing market has peaked. The relatively low inventory of homes will keep prices high, but I expect a slow normalization of the housing market. I don’t see the housing market bubble popping, but the additional costs to buy a home due to rising interest rates will cause many to delay future purchases.
As we approach the Memorial Weekend holiday, millions of people will hit the road for the unofficial start of summer. This travel weekend will likely bring even higher gas prices but will unlikely deter many Americans from their planned travels. As you plan your family adventures, ensure to budget conservatively due to much higher costs than years prior.