Housing represents about a third of the basket of goods and services that the BLS uses to track inflation in the Consumer Price Index, the largest component. This is very bad.

Shelter inflation is generally slow to come up and slower to come down than other inflation components, posing a challenge for the Federal Reserve, said Douglas Holtz-Eakin, president of the American Action Forum and a former Congressional Budget Office director.

Because rent and housing prices are going up faster than most other items in the CPI, the inflation rate is almost certain to continue to accelerate in the coming months.
In fact, housing prices have never gone up faster.

The MoM increase in Case-Shiller was at 2.09%. This is the largest MoM increase in the Case-Shiller index on record (since 1975), and stronger than any month during the housing bubble or during the late ‘70s with high inflation.

U.S. house prices rose 18.7 percent from the first quarter of 2021 to the first quarter of 2022 according to the Federal Housing Finance Agency House Price Index (FHFA HPI®).
“Those of us who have been anticipating a deceleration in the growth rate of U.S. home prices will have to wait at least a month longer,” says Craig J. Lazzara, Managing Director at S&P DJI. “The National Composite Index recorded a gain of 20.6% for the 12 months ended March 2022; the 10- and 20-City Composites rose 19.5% and 21.2%, respectively. For both National and 20-City Composites, March’s reading was the highest year-over-year price change in more than 35 years of data, with the 10-City growth rate at the 99th percentile of its own history.

Industry data shows home prices rose a blistering 18.8 percent in 2021, and rent has climbed 17.6 percent nationwide over the last year, our Katy O’Donnell reported in March. But those prices haven’t fully shown up in inflation figures because leases are typically annual.

It seems mind-blowing that housing prices are going up so fast despite mortgage rates sitting at 13-year highs, and rates are almost certain to go higher still.
Instead of driving down home sales and prices, it's actually driving home sales and prices higher.

A large reason for this dynamic is simple - FOMO - fear of missing out.
FOMO has traditionally been something you see at or near the top of a bubble.

Only in the last couple months has housing inventory been rising and listings been falling.

All of that adds up to housing affordability declining at an "American Dream Destroying" rate.

Rental prices aren't going up as quickly as housing prices, but it's pretty darn close.

Over the first five months of 2022, rents have increased by a total of 3.9 percent, compared to an increase of 6.1 percent over the same months of 2021. Year-over-year rent growth currently stands at a staggering 15.3 percent, but is down slightly from a peak of 17.8 percent at the start of the year.

This massive increase in rental prices is hitting just as emergency rental aid allocated during the pandemic is finally running out.

Emergency rental aid has helped keep millions of people in their homes during the pandemic. But that federal program will start winding down this summer, when it expects to have allocated all of the $46 billion from Congress.

About half of that has been spent so far, and in some places programs are now running out of their share of the money and shutting down. That's sending eviction filings up sharply, even as rents spike and inflation cuts deeper into household budgets.

"The longer we go past the time the eviction protections or resources are gone," she says, "the more we're seeing in some of these cities, eviction filing rates reach 150%, 200% of pre-pandemic averages."

I just don't see how this ends up in anything but a disaster.