Inflation sees the lowest annual rise since 2021

Published On Oct 10, 2024, 1:34 PM

Inflation measured by the Consumer Price Index (CPI) has seen the lowest annual rise since February 2021, at 2.4% over the last 12 months. In September, the CPI increased by 0.2%, which mirrors previous months. Major contributors to this rise were food and shelter costs. Despite these increases, there is optimism as energy costs fell by 1.9% in September. The Federal Reserve aims for around 2% inflation before considering cutting interest rates, which it may do soon, potentially impacting mortgage rates favorably. Existing mortgage rates are fluctuating around 6%, but recent interest rate cuts from the Fed could stabilize or decrease them further, leading to rising home sales.

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With lower inflation growth and a likelihood of interest rate cuts, market conditions may improve, particularly for housing-related stocks and ETFs. Investors should consider REITs and homebuilder stocks as they could benefit from stabilizing mortgage rates and increased home sales.

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