In this Real Estate News Brief for the week ending June 17th, 2023... why we might see two more rate hikes this year, what the latest consumer price report is showing us, and the cities that are attracting the most attention from renters!   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   We begin with economic news that grabbed headlines this last week. Members of the Fed’s Open Market Committee decided to put their rate hike regimen on pause for the month of June, but said that two more rate hikes are likely later this year. The decision was unanimous for the pause, but not so for the rate hikes. Two members don’t see any further hikes, four are anticipating one more rate hike, and nine are expecting the need for two. Two more believe we’ll need three, and one is saying four. (1)   By holding the interest rate steady for the time being, the Fed will have a chance to “assess additional information and its implications for monetary policy.” Fed Chief Jerome Powell said at a news conference: “We have raised our policy interest rate by five percentage points, and we’ve continued to reduce our security holdings at a brisk pace. We’ve covered a lot of ground and the full effects of our tightening have yet to be felt.”   The Federal Funds rate is currently in a target range of 5 to 5.25%. Assuming quarter-point hikes, another two would bring that up to about 5.6%. Committee members meet next in July. Powell emphasized that the “core rate” of inflation for the personal consumption expenditure index, or PCI, is the most important indicator.    The Fed received two other reports on inflation right before the meeting. The consumer price index, or CPI, shows that prices rose only .1% in May, mostly due to less expensive gas. The low rate of monthly inflation brought the yearly rate down from 4.9% to 4%. That’s the lowest it’s been since March of 2021. When you omit prices for gas and food to get the core rate, there was a .4% gain with an annual rate that slipped from 5.5% to 5.3%. (2)   The U.S. Department of Labor Statistics also released the producer price index, or PPI, for May. It shows that wholesale prices fell .3% in May. It’s the third time they’ve gone down in the past four months. That brings the yearly rate down from 2.3% to 1.1%. Again, the reading is slightly different for the core rate, which didn’t move in either direction. The yearly core rate dropped from 3.3% to 2.8%. The PPI represents what companies pay for producing their goods such as packaging and transportation, which they often pass on to the consumer. (3)   Weekly jobless claims were unchanged from the previous week at 262,000, while the number of continuing claims was up about 20,000 to a total of 1.78 million. (4)   Mortgage Rates   Mortgage rates were down slightly for the week. Freddie Mac says the average 30-year fixed-rate mortgage was down two basis points to 6.69%. The 15-year was down 3 points to 6.1%. (5)    In other news making headlines…   Potential Sellers Remain on the Sidelines   High interest rates are keeping many potential sellers on the sidelines. Redfin notes that almost everyone with a mortgage has an interest rate below 6%. About 80% of homeowners have an interest rate below 5% and almost 25% have one below 3%. (6)   As for inventory, Redfin says there are about 6% fewer homes for sale now than there were a year ago, and 40% fewer homes for sale than there were five years ago in June of 2018, before the pandemic. (7)   Redfin blames the shortage on high mortgage rates, and a construction slump that began more than a decade ago. The number of months it would take to sell the inventory on hand is 2.6. A housing market with a balance between supply and demand typically has four to five months of supply.   Most Popular Cities Among Renters   A new report shows that the Midwest has become quite popular among renters. According to RentCafe’s Renta