It does not look too good for mortgage rates to go down soon. Those increases in building materials will impact the number of new houses contractors will build this year. Building materials, those which are used for residential construction, are up 8% thus far in 2022.
Nevertheless, we are looking at an increase in overall prices. Forecasts into the future are optimistic, with projected rates going down a little bit. Bloomberg has predicted that inflation will go up by 5.1%, and the war in Ukraine can influence that final figure. These may be the high figures for the year. The inflation rate for May is projected to be 8.2%. However, gasoline prices went up 40%, and the consumer price index rose 6.5%, which was below forecasts but still more than in 40 years. In February, the rate went down to 7.9%, which was lower than the forecast. That is the highest it has been since December 1981. The annual inflation rate nationally was 8.5% in March 2022.
Recent inflation figures have shocked the system, and American consumers have not seen such data in decades. Economic forecasting is vulnerable to both crisis and good news. We also must keep in mind that anything can cause a change in direction. Instead, we should be looking at the figures and what they suggest to us. We need to put politics and opinions aside for a moment.