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An improvement in housing demand in the early months of 2023 has translated to a healthy start to the spring selling season. However, continued elevated levels of inflation and the efforts to cool the economy by the Federal Reserve provide uncertainty around the labor market, mortgage rates, and demand in the coming months.

With an excess of data coloring the economic picture, economists from Zonda, the NAHB, and the National Association of Realtors (NAR) shared the indicators and trends to watch this spring to help understand the health and stability of the housing market and the overall economy.

Inflation, Jobs, and Affordability

Zonda chief economist Ali Wolf says labor market and inflation data are the “two biggest indicators” to watch in the coming months. Inflation has remained at levels well above the Federal Reserve’s target of 2% but has shown signs it may be past its peak, while the labor market has remained strong despite nine short-term rate hikes to the Federal Funds rate.

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