Inflation Eases—What It Means for Homeowners and Buyers
August’s inflation data brought good news, with the Personal Consumption Expenditures (PCE) price index rising just 0.1%. This brings the 12-month inflation rate to 2.2%, the lowest since early 2021. Core PCE, excluding food and energy, also rose 0.1%, maintaining a 2.7% year-over-year increase.
Why does this matter for homebuyers and homeowners? Lower inflation signals that the Federal Reserve is approaching its 2% target. This opens the door to potential interest rate cuts, which could lower mortgage rates and make borrowing more affordable.
While inflation is cooling, the economic picture is still mixed, with personal income and spending showing slower growth. This means a more favorable lending environment may be coming soon for homebuyers. Keep an eye on upcoming Fed moves; further rate cuts could make now a smart time to lock in a mortgage.