US Housing Market Suffers Due To rising In Inflation

The US has faced a record inflation rise for the last few months. The housing market is one of the most affected sectors due to increased prices. Increasing migrants in a few cities have surged the prices of several commodities. Market Watch reports that consumer prices have increased by 7% in the last 24 months. Several housing markets face severe challenges due to transplants from different parts of the US; the reports show that Atlanta is witnessing the highest inflation rate. The consumer prices are up by 9% during the last year. Several other states have high inflation rates.

US Housing Market Suffers Due To rising In Inflation: Situation Worsens

Migrants Have Fueled The Price Rise

Market Watch quoted Redfin deputy chief economist Taylor Marr, who said, “Migration is one reason among many why the cost of everything from food to fuel is rising. The new residents are winners because the cost of living is still low compared to where they came from, even with higher inflation. A person moving from New York City to Atlanta will probably enjoy lower housing costs in their new hometown. That means they’re able to spend more on other things, which in turn means local businesses can charge higher prices. The flow of people moving from traditionally expensive cities to more affordable areas will slow down because, quite simply, prices are rising so fast that those places won’t be affordable anymore.”

Expensive Cities Have Much Lower Inflation Levels

Market Watch reports that cities with a higher cost of living have witnessed lower inflation rates in the previous months. Thousands of residents have shifted from Los Angeles, San Francisco, and New York to save costly bills. The homebuyers want a larger house on a similar budget and get rid of expensive everyday expenses. Reports show a 4% inflation rise in San Francisco in the last year; the expensive cities have a lower inflation rise than more affordable places.

The data shows that Phoenix has witnessed the maximum rise in home prices recently; thousands of migrants have settled there due to significantly low prices. Many business people have drawn huge profits due to the steep increase in property sales. However, the cycle is bound to stop when the cheaper cities become expensive after the constant price rise.