The consumer price index rose 0.6% in August

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1. The Consumer Price Index rose 0.6% in August

The Consumer Price Index rose 0.6 percent in August on a seasonally adjusted basis, after increasing 0.2 percent in July. Over the last 12 months, the all-items index increased 3.7 percent before seasonal adjustment.

However, excluding volatile food and energy, the core CPI increased 0.3% in August. Indexes which increased in August include rent, owners' equivalent rent, motor vehicle insurance, medical care, and personal care. The indexes for used cars and trucks and recreation were among those that decreased over the month.

The bottom line: For now, the CPI numbers add to a run of data recently that suggests inflation is receding alongside a cooling labor market. Fed officials are expected to hold interest rates steady. LINK

2. Catch up quick

🧑‍⚖️ Hudson County real estate investor sentenced to two years in prison for conspiring to orchestrate a fraudulent HELOC scheme that led to over $400,000 in losses. (DOJ)

👀 A 3% mortgage rate in a 7% world? This startup says it can do that. (WSJ)

🏦 A primer on Federal Home Loan Banks. What are they? Why are they under scrutiny? And why they are failing at their mission of supporting affordable housing. (Bloomberg)

3. Barriers stopping would-be buyers

According to two new reports from the NAR and Redfin, the top three reasons consumers report not yet purchasing a home are the fact there are not enough homes available for purchase within their budgets (34%), they’re waiting for mortgage rates to drop (18%), or prices to drop (9%). Despite a slight dip from August's peak, mortgage rates still surpass 7%.

The median asking price for the four weeks ending Sept. 10 was $384,475, up 4.3% YOY, the highest increase since Nov. 2022. Meanwhile, the median monthly mortgage payment at a 7.12% mortgage rate was $2,632, an all-time high up 14% YOY. NAR suggests leveraging down payment assistance programs to address some of the challenges. LINK

4. Amazon pledges $40M for affordable homeownership

Amazon is pledging $40 million in grants and loans for affordable homeownership projects in several regions of the country, including the Seattle area. The announcement marks an expansion of the tech giant’s Housing Equity Fund, started in 2021, through which Amazon lends and donates money for affordable housing.

Until now, the fund has primarily supported affordable rental developments; this marks its first investment in homeownership projects. “Those who are able to own homes are more likely to experience long-term economic stability, while those who can’t are more likely to struggle financially,” said Senthil Sankaran, managing principal of the equity fund, in a statement. LINK

5. Mortgage rates rise again following two weeks of declines

US mortgage rates rose for the first time since late August, ratcheting up the pressure on borrowers. The average for a 30-year, fixed loan climbed to 7.18% from 7.12% a week earlier, Freddie Mac said in a statement yesterday.

“The reacceleration of inflation and strength in the economy is keeping mortgage rates elevated,” Sam Khater, Freddie Mac’s chief economist, said in the statement.

The run-up in rates means buyers are spending more on their mortgages. A borrower with a $600,000 loan would be paying $4,065 a month at current levels, up 56% from the start of 2022, when rates were near record lows. LINK

☀️ See you on Monday!

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