{"id":16212,"date":"2025-08-22T13:31:15","date_gmt":"2025-08-22T13:31:15","guid":{"rendered":"https:\/\/www.europesays.com\/ie\/16212\/"},"modified":"2025-08-22T13:31:15","modified_gmt":"2025-08-22T13:31:15","slug":"housing-market-home-prices-dropping-could-send-inflation-dropping-to-1","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/ie\/16212\/","title":{"rendered":"Housing Market: Home Prices Dropping Could Send Inflation Dropping to 1%"},"content":{"rendered":"<p><a target=\"_self\" class=\"\" href=\"https:\/\/www.businessinsider.com\/personal-finance\/investing\/what-is-inflation\" data-track-click=\"{&quot;element_name&quot;:&quot;body_link&quot;,&quot;event&quot;:&quot;tout_click&quot;,&quot;index&quot;:&quot;bi_value_unassigned&quot;,&quot;product_field&quot;:&quot;bi_value_unassigned&quot;}\" rel=\"nofollow noopener\">Inflation<\/a> could be about to see a big drop, even with tariffs still looming over the economy. <\/p>\n<p>The US housing market will be a big driver of headline disinflation, according to Rosenberg Research, which foresees a major <a target=\"_self\" class=\"\" href=\"https:\/\/www.businessinsider.com\/home-price-drops-cities-housing-market-freeze-inventory-home-buyers-2025-8\" data-track-click=\"{&quot;element_name&quot;:&quot;body_link&quot;,&quot;event&quot;:&quot;tout_click&quot;,&quot;index&quot;:&quot;bi_value_unassigned&quot;,&quot;product_field&quot;:&quot;bi_value_unassigned&quot;}\" rel=\"nofollow noopener\">drop in home prices<\/a> that could drag the pace of inflation close to 1% \u2014 well below the Fed&#8217;s 2% price growth target.<\/p>\n<p>The firm, led by top economist David Rosenberg in 2020, said it saw evidence of a &#8220;big downturn&#8221; in the housing sector. In a note to clients this week, the firm pointed to its proprietary Housing Market Activity index, a gauge of how busy housing is based on eleven indicators of activity.<\/p>\n<p>The index is now showing that housing is mired in its <a target=\"_self\" class=\"\" href=\"https:\/\/www.businessinsider.com\/house-prices-market-set-worst-year-decades-meredith-whitney-2025-6\" data-track-click=\"{&quot;element_name&quot;:&quot;body_link&quot;,&quot;event&quot;:&quot;tout_click&quot;,&quot;index&quot;:&quot;bi_value_unassigned&quot;,&quot;product_field&quot;:&quot;bi_value_unassigned&quot;}\" rel=\"nofollow noopener\">worst downturn since 2009<\/a>, around the time the subprime mortgage crisis plunged the economy into a recession, Robert Embree, a senior economist at the firm, said.<\/p>\n<p>              <img xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"lazy-image \" encoding=\"UTF-8\" width=\"1\" height=\"1\" data-content-type=\"image\/png\" srcs=\"{&quot;https:\/\/i.insider.com\/68a5e998a17a8c5b405328b2&quot;:{&quot;contentType&quot;:&quot;image\/png&quot;,&quot;aspectRatioW&quot;:1431,&quot;aspectRatioH&quot;:1006}}\" alt=\"Chart showing Rosenberg Research's Housing Market Index\"\/><\/p>\n<p>                      Rosenberg Research&#8217;s Housing Market Index shows that the sector is in its worst dowturn since 2009.<\/p>\n<p>              Haver Analytics\/Rosenberg Research<\/p>\n<p>Ten of the 11 indicators that feed into the index are posting significant declines over the last six-month period, Embree added. Here are the five showing some of the largest drops in activity:<\/p>\n<ul>\n<li><strong>Housing starts<\/strong>: down 23.9%<\/li>\n<li><strong>New single-family homes sold<\/strong>: down 23.7%<\/li>\n<li><strong>Existing homes sold<\/strong>: down 16.1%<\/li>\n<li><strong>Quarterly New Tenant Rent Index<\/strong>: down 14.2% over the last two quarters<\/li>\n<li><strong>Potential buyer traffic<\/strong>: down 7 points. This is the most important data point feeding into the index, Embree said.<\/li>\n<\/ul>\n<p>The only indicator that hasn&#8217;t contracted over the last six months is home prices. The Case-Shiller 20-City Composite Home Price Index, which tracks house prices in 20 major metropolitan areas, is up 0.8% over the last half-year.<\/p>\n<p>But reduced activity will likely weigh on prices, as sellers will need to lower prices in order to entice buyers back to the market. On a six-month basis, the Case-Shiller Composite will likely enter negative territory &#8220;very soon,&#8221; Embree said.<\/p>\n<p>That could lead to a big drop in inflation down the line \u2014 even as some economists worry that tariffs could stoke higher prices for consumers. Shelter prices make up around a third of the <a target=\"_self\" class=\"\" href=\"https:\/\/www.businessinsider.com\/personal-finance\/investing\/consumer-price-index\" data-track-click=\"{&quot;element_name&quot;:&quot;body_link&quot;,&quot;event&quot;:&quot;tout_click&quot;,&quot;index&quot;:&quot;bi_value_unassigned&quot;,&quot;product_field&quot;:&quot;bi_value_unassigned&quot;}\" rel=\"nofollow noopener\">consumer price index<\/a>.<\/p>\n<p>&#8220;This housing downturn will have persistent disinflationary consequences into 2026 as today&#8217;s low rents compress the shelter component of CPI with a predictable twelve-month lag,&#8221; Embree wrote. &#8220;The massive drop in new rents implies a headline CPI reading of +1.2% to +1.8% YoY in 2026Q2, depending on the size of the tariff shock.&#8221;<\/p>\n<p>Please help BI improve our Business, Tech, and Innovation coverage by sharing a bit about your role \u2014 it will help us tailor content that matters most to people like you.<\/p>\n<p> What is your job title?<\/p>\n<p>                        (1 of 2)<\/p>\n<p> What products or services can you approve for purchase in your role?<\/p>\n<p>                        (2 of 2)<\/p>\n<p>                    Continue<\/p>\n<p>                  By providing this information, you agree that Business Insider may use<br \/>\n                    this data to improve your site experience and for targeted advertising.<br \/>\n                    By continuing you agree that you accept the<br \/>\n                  <a href=\"https:\/\/www.businessinsider.com\/terms\" rel=\"nofollow noopener\" target=\"_blank\"><br \/>\n                    Terms of Service<br \/>\n                  <\/a><br \/>\n                  and<br \/>\n                  <a href=\"https:\/\/www.businessinsider.com\/privacy-policy\" rel=\"nofollow noopener\" target=\"_blank\"><br \/>\n                    Privacy Policy<br \/>\n                  <\/a><br \/>\n                  .<\/p>\n<p>\n                  Thanks for sharing insights about your role.\n                <\/p>\n<p><a target=\"_self\" class=\"\" href=\"https:\/\/www.businessinsider.com\/inflation-july-cpi-consumer-price-index-federal-reserve-interest-rates-2025-8\" data-track-click=\"{&quot;element_name&quot;:&quot;body_link&quot;,&quot;event&quot;:&quot;tout_click&quot;,&quot;index&quot;:&quot;bi_value_unassigned&quot;,&quot;product_field&quot;:&quot;bi_value_unassigned&quot;}\" rel=\"nofollow noopener\">Consumer prices<\/a> rose by 2.7% year-over-year in July. At the lower end of Rosenberg Research&#8217;s forecast, that implies the pace of inflation will more than halve in the next year.<\/p>\n<p>Concerns about disinflation \u2014 which is when the pace of inflation slows \u2014 and <a target=\"_self\" class=\"\" href=\"https:\/\/www.businessinsider.com\/why-is-deflation-bad-2015-1\" data-track-click=\"{&quot;element_name&quot;:&quot;body_link&quot;,&quot;event&quot;:&quot;tout_click&quot;,&quot;index&quot;:&quot;bi_value_unassigned&quot;,&quot;product_field&quot;:&quot;bi_value_unassigned&quot;}\" rel=\"nofollow noopener\">deflation<\/a> \u2014 when prices in the economy see an outright decline \u2014 are scant on Wall Street. Forecasters are generally more concerned about inflationary pressures from tariffs. <\/p>\n<p>In a separate report this month, Rosenberg said he saw a <a target=\"_self\" class=\"\" href=\"https:\/\/www.businessinsider.com\/us-economy-inflation-outlook-deflation-shock-tariffs-immigration-spending-rosenberg-2025-8\" data-track-click=\"{&quot;element_name&quot;:&quot;body_link&quot;,&quot;event&quot;:&quot;tout_click&quot;,&quot;index&quot;:&quot;bi_value_unassigned&quot;,&quot;product_field&quot;:&quot;bi_value_unassigned&quot;}\" rel=\"nofollow noopener\">deflation shock<\/a> hitting the US, thanks to pressures like <a target=\"_self\" class=\"\" href=\"https:\/\/www.businessinsider.com\/trump-immigration-crackdown-wall-street-mergers-border-crossings-hiring-staffing-2025-7\" data-track-click=\"{&quot;element_name&quot;:&quot;body_link&quot;,&quot;event&quot;:&quot;tout_click&quot;,&quot;index&quot;:&quot;bi_value_unassigned&quot;,&quot;product_field&quot;:&quot;bi_value_unassigned&quot;}\" rel=\"nofollow noopener\">Trump&#8217;s immigration crackdown<\/a> and the <a target=\"_self\" class=\"\" href=\"https:\/\/www.businessinsider.com\/geriatric-care-aging-population-boomers-healthcare-nursing-homes-doctor-shortage-2025-2\" data-track-click=\"{&quot;element_name&quot;:&quot;body_link&quot;,&quot;event&quot;:&quot;tout_click&quot;,&quot;index&quot;:&quot;bi_value_unassigned&quot;,&quot;product_field&quot;:&quot;bi_value_unassigned&quot;}\" rel=\"nofollow noopener\">aging US population<\/a>, which could curb consumer spending.<\/p>\n<p>Jay Hatfield, the CIO of Infrastructure Capital Advisors, said he also sees the makings of a deflationary trend in a recent note.<\/p>\n<p>&#8220;The key drivers of inflation are excessive money supply growth and oil prices. Both of these leading indicators are down double digits Y\/Y, which indicates we are headed for deflation on market based\/real time measures of inflation,&#8221; he wrote.<\/p>\n<p>Research firm Pantheon Macroeconomics predicts a decline in housing prices offsetting around half of the inflationary impact of tariffs.<\/p>\n","protected":false},"excerpt":{"rendered":"Inflation could be about to see a big drop, even with tariffs still looming over the economy. The&hellip;\n","protected":false},"author":2,"featured_media":16213,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[175],"tags":[6150,79,5813,14625,179,18,6262,14621,3847,19,14622,14619,14626,17,188,14624,180,14620,14623,2001],"class_list":{"0":"post-16212","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-markets","8":"tag-activity","9":"tag-business","10":"tag-consumer-price-index","11":"tag-deflation","12":"tag-economy","13":"tag-eire","14":"tag-firm","15":"tag-home-price","16":"tag-housing","17":"tag-ie","18":"tag-indicator","19":"tag-inflation-dropping","20":"tag-inflationary-pressure","21":"tag-ireland","22":"tag-markets","23":"tag-pace","24":"tag-price","25":"tag-robert-embree","26":"tag-rosenberg-research","27":"tag-tariff"},"share_on_mastodon":{"url":"","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/16212","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/comments?post=16212"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/16212\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media\/16213"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media?parent=16212"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/categories?post=16212"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/tags?post=16212"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}