SAN JOSE, Calif. (KRON) — Real estate prices, toothpaste, toilet paper and everyday items are costing more as inflation hits a 40-year high. The Federal Reserve announced new plans to rein in inflation.
The Federal Reserve announced they will hike interest rates until inflation is under control. However, Zillow says don’t expect Bay Area real estate prices to cool down.
Zillow economists says a typical mortgage in the Bay Area has gone up over 50% in the last year to roughly $6,400, and rising rates might actually add more demand in the short term as shoppers race to get their foot in the door before the damage to their wallet gets worse.
“Fuel, groceries and other consumables are going to be higher,” Dr. Dietrich Von Biedenfeld, University of Houston said.
The professor says car payments and credit cards rates interest rates will rise and take effect immediately.
“Overall this interest rate is going to help the U.S. government justify the billions of dollars they’ve been spending in aid,” he said. “At the end of the day Jerome’s Powell decision and Janet Yellon, is going to support an economic policy of the administration to better replace the debt and better reconcile the national deficit.”
Zillow says 80% of bay area homes are selling for more than their list price, although at some point demand will even out.
Biedenfeld, says the interest rate may slow inflation, but will hurt middle class and low-income families the most.
