Housing, rent prices soar amid rising inflation
FOX 2 - Rental prices are surging across the country as part of the impact of inflation.
"Rent is really terrible, the places they’re offering you to live for the rent prices - its ridiculous," said Detroiter Sherri James.
According to recent data from Rent.com, the price of a one-bedroom apartment in Detroit has gone up 28 percent. A two bedroom apartment is up 27 percent, while three-bedroom apartments have come down a bit, by about four percent.
"It’s probably better to buy a home than to rent nowadays," James said.
But buying a home may be harder than ever now. New data shows the average rate for a 30-year fixed mortgage exceeded 6% this week, the highest level since 2008 - more than twice what it was a year ago. But some may still see the value in owning, over renting.
"If I'm going to pay you $1,300 dollars to live there, I might as well pay that to the mortgage company for a better home in a better neighborhood," James said.
The economic backdrop is not very appealing either. The Federal Reserve is raising interest rates to deal with the high inflation.
The most recent year-over-year increase in the consumer price index came in at 8.3 percent. That means borrowing could get even more expensive.
Many analysts expect a worsening labor market because of the fed's more hawkish policies.
Oakland University Economist Dr. Michael Greiner weighed in on the situation.
"The markets rely upon what the Fed says," he said. "For the Fed to change what it’s doing, especially when it is so close to an announcement, is really quite unusual.
"So I am still sticking with 75 basis points, but I still think we are going to see more increases like that going forward for the next couple of months. This report shows that the Fed clearly still has a lot of work to do - and they have signaled they are serious about wanting to get the job done."
And a job done will have to mean a slowing economy - the question is, to what degree that will happen.