In this Real Estate News Brief for the week ending April 29th, 2023... you’ll get mixed news on inflation, results for the first quarter GDP, and a rate hike in South America that you never want to see here!   Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.   Economic News   Let’s begin our economic review with the latest inflation report. The Personal Consumption Expenditure Index for March was released on Friday and showed a tiny .1% increase in overall inflation. That brought the yearly rate down from 5.1% in February to 4.2% in March – the lowest it’s been since May of last year. But unfortunately, the news wasn’t as good for the PCE’s core rate. When you omit prices for food and gas, the core rate rose .3%, and brought the annual rate down from 4.7% to 4.6%. As MarketWatch reports, the core rate hasn’t changed much for the last five months. (1)   The PCE is the Fed’s preferred inflation gauge, and will be an important factor in determining whether to hike interest rates again this week. It’s generally believed that the central bank will hike rates another quarter point, but it’s a delicate situation because the economy is teetering on the brink of a recession. As Bill Adams of Comerica told MarketWatch: “The Fed is stuck between raising interest rates and likely pushing the economy into a recession… or pausing and risking that inflation accelerates in a few quarters if the economy regains momentum and sticky prices stay high.”   First quarter GDP is out. It shows the economy grew at a rate of 1.1%. That’s down from a GDP of 2.6% in the fourth quarter. Consumer spending has been strong, but was offset by spending cautiousness among businesses. Home construction and sales are also a drag on the GDP, thanks to higher mortgage rates. But MarketWatch says the biggest impact on the GDP was a lack of inventory growth. Business inventories were down $138 Billion. If that had not been the case, and inventory growth remained flat, the GDP would have reportedly been much higher, at 3.4%. (2)   Jobless claims reversed course this last week and fell an unexpected 16,000 to a seasonally adjusted 230,000. Economists had expected them to rise slightly. The report shows that the job market is still strong, which feeds into the Fed’s concern about inflation. Continuing claims were also down 3,000 to 1.86 million. (3)   Housing demand and a lack of existing home inventory drove new home sales higher in March, despite high mortgage rates. The Commerce Department says they were up 9.6% for the month, to a seasonally adjusted annual rate of 683,000. The surge was mostly driven by new home sales in the Northeast. The median price for a home was $449,800. Chief Economist, Lisa Sturtevant, at Bright MLS, says that about one in three homes for sale are new builds. Historically, it’s more like one in 10. (4)   Although the sale of existing homes has been rising over the last several months, they fell in March. The National Association of Realtors says contract signings were down 5.2% for the month which is more than economists had predicted. NAR says about a third of the listings are seeing multiple bids, and 28% are selling for more than the asking price. (5)   The February report on home prices by Case Schiller shows the national index was up .2% for the month, and 2% for the year. That’s the smallest increase in home price growth since 2012. (6)   Mortgage Rates   NAR says that realtors are predicting that mortgage rates will hit 6% this year, and 5.6% next year. But they aren’t there yet. Freddie Mac says the average 30-year fixed rate mortgage was up 4 basis points this last week, to 6.43%. The 15-year was down 5 points to 5.71%. (7)   In other news making headlines…   Study: Home Demand Rises After Periods of High Inflation   The desire to own a home will likely increase thanks to inflation. The results of a new study by UC San Diego show that the inflation we’r