Rising home prices and mortgage rates pushed housing affordability to lows not seen in a decade in the second quarter of 2018, reports the National Association of Home Builders. From the beginning of April to the end of June, 57.1% of all new and existing home were affordable, down from 61.6% in the first quarter. The national median home price rose from $252,000 in the first quarter of 2018 to $265,000 in the second quarter, the highest quarterly median price in the history of the Housing Opportunity Index. At the same time, average mortgage rates surged by more than 30 basis points in the second quarter to 4.67% from 4.34% in the first quarter.
Consumer inflation remained tame in July from June but year-over-year core consumer inflation rose the most in 10 years. The Consumer Price Index (CPI) rose 0.2% in July from June in line with estimates as rising shelter costs offset a drop in energy prices. Over the past 12 months, CPI rose 2.9%, unchanged. However, the Core CPI, which strips out food and energy, rose 2.4%, the highest rate since September 2008. But inflation remains on the tame side with no evidence of a spike higher in the coming months.
Gas prices at the pumps remained unchanged today from last week, despite lower oil prices. Motorists are still paying the highest August prices since 2014. The national average price for a regular gallon of gas is $2.87, the same from a month ago but up $0.50 from last year this time. Motorists should see lower prices by mid-September as the summer driving season winds down in a few weeks.