“We’re going to see a significant increase at home,” said Larry Summers, a Harvard professor, economist, director of the National Economic Council under President Barack Obama, and Secretary of the Treasury under President Bill Clinton, in an interview published Friday in Bloomberg Wall Street Week. Price:% p. . the slowdown in construction combined with the “inflation in the inflation measures used” and the fact that “more housing problems are ahead”.
Summers said: “The reality is that people who signed new leases or bought new homes last year were paying 15% to 20% more than they did a year ago. Neither type is included in the CPI or the Fed’s preferred measure, the PCE index. The only thing that gets drenched is a small subset of people who see a change in their rent and a fixed rent for everyone else. This means that you will see inflation in the future, as you do now, not because new rentals are growing too fast, even though they are growing at a reasonable rate, but simply because of people whose rentals are approaching and seeing huge growth. Therefore, we will see a significant increase in inflation in house prices, which will probably be used for another six to nine months. It differs from how builders react. Builders do not respond to this. Builders are reacting to what they think home prices will be in a year. And this [has] So we’re seeing a slowdown in the pace of construction when it comes down. And that’s what happens when interest rates rise. In a way it makes sense. If there is a recession in economic activity, it is better to stagnate in something where we already have a large supply and only new flows will be affected, than something that we must consume regularly and not for a long time. But I think we can count on a softening of housing conditions in the future. … Like I said, I think we’re going to have a serious recession in the next few years, and if that’s the case, I think we’re going to have a lot more housing problems ahead of us.”
Source: Breitbart
