ASU economist says high inflation due to housing market spikes
According to the U.S. Bureau of Labor Statistics, the Phoenix area experienced the highest rate of inflation of any metropolitan area over the past year.
The average consumer price index increase from last year to this one is 7.9%, but prices in the Valley rose 10.9%.
Arizona State University economist Dennis Hoffman told PBS’s “Arizona Horizon” that’s partially due to price increases in the Valley’s housing market.
“We have the highest housing price inflation in the nation, housing prices went up faster in Phoenix than anywhere else,” said Hoffman. “We’ve got mortgage rates of a 30-year mortgage approaching 6%. We’ve got expensive groceries. We’ve got expensive everything, and that’s hitting, especially, low-income people.”
Hoffman says Phoenix had a period of “stagflation” earlier this year, where economic growth slowed, but inflation continued increasing, and that the Valley could experience similar conditions in the near future.
The U.S. Federal Reserve increased its key short-term interest rate by half a percent last week to combat inflation. It was the highest increase in 22 years.