When it comes to the economy, one sector Americans should be "most worried" about is how growing inflation and the rising interest rates are affecting the housing market, economist Stephen Moore said on Newsmax, Thursday.
"You've seen this gigantic increase in mortgage rates, from 2.7% to 6.2%, and those increases mean your monthly payments rise by, depending on the size and the cost of your house, maybe by as much as $1,500 a month," Moore, a senior economic adviser under former President Donald Trump, said on Newsmax's "National Report." "If you look at that over a 30-year period, that means you're paying between $150,000 to $200,000 more in mortgage interest expenses over that period."
That kind of extra cost hurts buyers, who won't be able to spend as much money on a house as they would want, and sellers, because they'll be forced to drop the prices of their houses so they can clear the market, said Moore.
Further, there is a slowdown in new homes being built and purchased, and that is another important sector for the economy, said Moore.
He added that he'd be a "little bit nervous" about buying a home at this time, but at the same time, interest rates may keep climbing, so "you might want to lock in at 6.2%, even though that's a lot higher than it was a year and a half ago. Maybe refinance later, if you can."
Meanwhile, Moore said "everybody got caught by surprise" earlier this week when inflation only marked a slight dip, with the markets taking a sharp drop.
"It's important for people to understand what's going on here," Moore said. "Gas prices did come down there, down by about a $1.25 a gallon from their peak from a couple of months ago when they hit $5 a gallon, but almost everything else went up in price.
"Grocery prices went up. Health insurance prices went up, transportation costs, new cars, used cars went up … and that canceled out the effect of the lower gas prices."
That spooked Wall Street, he added, and investors now expect the Fed will become even more aggressive in raising interest rates.
"It's a big mess," Moore said.
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