Prospective homebuyers hoping for a big drop in home prices may have a longer wait. The Labor Department’s November Consumer Price Index (CPI) shows housing costs, which include rent, are still rising.
In fact, the report says the index for shelter was by far the largest contributor to the monthly 0.1% increase in the CPI. The cost of putting a roof over your head increased 0.6% from October, even though home sellers in many housing markets have cut their asking price.
For the year, housing costs have increased by 7.1%, making a home purchase much more difficult for many because interest rates have also risen.
Food costs are also rising
Food costs also continued to rise last month. The food index rose by 0.5% last month, slightly less than October’s 0.6% rise. Over the last 12 months, food costs have risen by 10.6%.
Where you buy food continues to make a difference in what you pay. The cost of food purchased at the grocery store and consumed at home has risen 12.1% over the last 12 months. The cost of restaurant meals is up just 8.5% on an annual basis.
Food has been a consistent inflation driver and has had an outsized impact on household finances. Four of the six major grocery store food group indexes increased in November.
The index for fruits and vegetables increased 1.4%, a sharp rebound from October’s 0.9% decline. The price of cereals and bakery products rose 1.1%, slightly higher than the 1% increase in dairy products.
Egg prices are finally coming down
But there was some relief at the supermarket last month. The cost of meats, poultry, fish, and eggs fell 0.2% over the month after rising 0.6% in October. The prices of beef and pork were also lower last month.
Offsetting higher prices for food and shelter, the cost of energy plunged 1.6% last month, helped by a 2% decline in the price of gasoline. According to AAA, the national average price of regular is now $3.24 a gallon, nine cents a gallon less than a year ago.
Natural gas and electricity costs were also cheaper in November, defying mid-year forecasts that winter heating costs could hit record highs. So far, at least, that appears less likely.
The cost of used cars and trucks continued to fall after reaching record highs earlier this year. Used vehicle prices fell 2.9% in November and are down 3.3% over the last 12 months.