Purchasing power is shrinking for potential buyers as record home prices fuel inflation, and LegalShield’s Home Construction Index data showed the biggest drop on record (7.8 points) so that home builders manage supply chain and workforce challenges.
This drop and other measures, including a drop in residential permits (7.7%) in September, suggest that residential construction activity is unlikely to rebound in the near future.
“Our data shows that members are turning away from buying real estate and homes to consumer credit, employment and landlord / tenant advice from our network of legal service providers,” said said Jeff Bell, CEO of PPLSI, parent company of LegalShield. “There are more pressing issues on their minds with rising inflation, federal aid and the expiration of loan and eviction moratoria. ”
Inflation is also restraining consumer spending, as the prices of essential goods and services rise, and data shows that inflation-adjusted disposable income has declined in five of the past six months. This could lead to increased use of short-term financial tools, which will impact the Consumer Stress Index next year.
As inflationary pressures continue to rise, favorable employment trends dampen some positive developments and the Consumer Stress Index improved in October. Bankruptcies and foreclosures continue to remain at historically low levels.