Morning Wire Housing Market Woes & The U.K.’s New Prime Minister | 10.27.22
Oct 27, 2022
The housing market is facing a significant slowdown, with home sales plunging by 24% due to rising inflation and interest rates. Meanwhile, Rishi Sunak has stepped in as the new Prime Minister of the U.K. after a turbulent political period. His leadership aims to stabilize the economy amidst challenges from previous budget decisions. Additionally, new data reveals that blue states are exhibiting higher political engagement than red states, raising questions about civic participation leading up to the midterms.
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Housing Market Slowdown
- The housing market is slowing down at a record pace, impacted by rising interest rates and inflation.
- A 3% drop in home prices within a month hasn't occurred since 1987, showing a rapid deceleration.
Impact of Interest Rates
- The Federal Reserve's interest rate hikes are a primary driver of the housing market slowdown.
- Increased rates make homes less affordable, even with price cuts, shrinking the pool of potential buyers.
Rising Rent Prices
- Rent prices have increased by 25% nationally over the past two years, contrasting with falling home prices.
- This rent spike has pushed many renters out of the market, leading to increased multi-generational living.