BS news is presenting a new network-wide Series The Money Watch housing guide Focused on helping you achieve the American dream most Americans are Closely awaiting the federal reserve's Decision on interest rates and renters And buyers alike tell CBS news they are Struggling to deal with monthly costs That just keep going up let's listen It's definitely a disaster and it's hard To budget um when everything is Constantly changing we were waiting for Prices to come down or interest rates to Come down we made the decision it's it's Time to buy even if it's at an inflated Cost CBS News senior business and Tech Correspondent Jolene Kent is now with me In studio 57 so look the interest rates Have been a huge barrier for entry to a Lot of people is that sort of the wrong Way to think about it because you hear People say oh you can just refinance Down the road there are costs associated With refinancing that sometimes make it You know cost prohibitive so is putting It off wise will we ever see 3 4% Interest rates again well it's really Hard to say right now because we're Sitting in the sixes right now so the Good news is we're down from the 8% Mortgage rates things are already Floating down and it's important to note That the Federal Reserve Benchmark Interest rate is Loosely tied to
Mortgage rates but it does have an Impact on them so everyone's looking to Wednesday Fed chair Powell what are you Going to do but here is the reality of The situation if you look at rent since The since 2020 it's up 26% it's one of The primary drivers of inflation then You look at prices if you're a home Buyer you're out there searching right Prices are up 29% since 2020 so if you're out there Looking and you're trying to buy a home Right now and you're counting on Refinancing you still got to pay that Monthly mortgage that is still very Expensive so you've got a budget for That make sure you can meet that and Then hope for a refinance later but We're expecting a quarter point cut uh On Wednesday maybe a half point that Would be big news you mentioned how much Rent is going up what parts of the Country are seeing the highest increases And why yeah so we're seeing rent Increases in places where there's not a Lot of inventory so I want to make sure I have this list right we saw the Biggest increases in Virginia Beach Washington DC and Baltimore all up Double digit percentages then when it Comes to where is rent going down the Good news is San Diego Austin Jacksonville Florida and so we see that Likely going down because you have more
Inventory coming online solving the Housing supply problem with entrylevel Home H different types of homes that Takes time it's things aren't built Overnight right yeah that is a decade Long problem solution sort of Journey Right okay we've heard about the idea of Shrinkflation when it comes to products At the grocery store right chips right So essentially you're paying the same Amount but you're getting less Y is There shrink flation happening in the Housing market oh yeah I hate to tell You this but we're talking about 126 Square feet smaller average home is Right now in the United States compared To 5 years ago and yet you are paying Nearly $124,000 more so the shrinkflation is Not only real but it is deeply expensive It's even worse than just the Cheetos And the chips that we're talking about Yeah I would argue you could probably go Without the Cheetos if you need an extra Bedroom right or if you're looking for Square footage or if you need that Basement or or whatever you're looking For in your home 125 sare ft that's a Lot of space but what we're seeing right Now is the housing Market's in a tough Spot to answer your first question when Rates come down prices in a lot of these Big cities will continue to rise because Even when more Supply comes online that
Demand will continue to go up because You got people coming off the sidelines Right A lot of people sitting there Waiting being like okay chair Powell cut Those rates and I'll get back in but Then that creates more of a demand and Then the housing price itself is likely To trickle upwards we have very little Time left but what are some of your Other top lines from your reporting that You want to highlight in this series I Think it's really important to Understand the Dynamics and so before You go into home search it is very Important to understand what are you Going to be better off over the next 5 Years with your own budget and with your Own prospects when it comes to Employment and pay plan for the 5 years Hope for the best for the 10 years but Do not Bank on an interest rate coming Down aggressively because we just don't Know yet important top lines we always Appreciate you and of course we have Much more in this series so please tune In to the money watch housing guide Which continues all week tomorrow we Show you ways to determine whether Buying or renting is the right choice For you and later in the week we look at Housing Trends and some creative ways People are trying to get around this
