Rising housing costs are top contributor to inflation. What’s to be done about it?

Guess what sector is the largest contributor to inflation these days? Yup: housing. In February, overall house prices registered their smallest year-over-year gain since September 2021. Even so, housing’s share of the Consumer Price Index rose at an accelerated pace and was the largest contributor to the overall inflation rate, according to the National Association of Home Builders.

Housing inflation, aka the shelter index, accounted for more than 70% of the increase in the CPI in February, the NAHB says. The shelter index makes up more than 40% of the “core” CPI and is driven by higher house prices, which, in turn, are driven by supply constraints and higher development costs. And economists at the builders’ group say the Federal Reserve Board’s efforts to corral interest rates won’t have an impact on these costs.

“The Fed’s tools are limited in addressing shelter inflation,” read the NAHB report. Still, housing inflation is predicted to cool as additional supply becomes available.

If lender fails

There haven’t been any big mortgage company failures such as those in the banking industry this year — at least not yet. But a number of lenders have merged, filed for bankruptcy or simply shuttered their doors. All of which begs the question: What happens to your loan if your lender is suddenly no longer your lender?

The answer: You would probably be unaffected. Most likely, an investor would take over your mortgage. The rate and other terms would not change.

It isn’t quite as simple if your mortgage isn’t yet finalized, however. If your loan is in the pipeline and your lender simply merges with another, your application should continue to closing without incident. If your lender is closing its doors entirely, your loan officer will likely try to place you with another company. The terms could change a bit, but at least you’ll still be in the queue. However, you may be left out in the cold and have to start all over again with another lender.

People who already have a mortgage are unaffected by mergers, acquisitions and failures unless the company that administers loans on behalf of investor-owners — the loan servicer — changes. In that case, the law says both the new and the old servicers are required to notify you of the switch and tell you when you should stop paying the old one and start paying the new. The terms of your loan will not change.

Sometime thereafter, though, your payments could go up if the new servicer decides you haven’t been paying enough every month to cover your insurance and property taxes.

Hide and seek

Tip of the Day: Trying to find a home’s listing agent on sites like Zillow, and others can be difficult. The key is to find the digits labeled “MLS#” in the listing. Copy and paste those numbers into the search bar at (the official site of the National Association of Realtors).

When it takes you to the property’s page, scroll down until you see small letters that read “presented by.” That’s the listing agent 99% of the time, Miami broker Terry Brewer tells me.

‘Golden handcuffs’

Here’s one reason for the dearth of houses for sale: According to the latest government report, 84% of all outstanding mortgages have a mortgage rate at or below 5%. And 63% have a rate at or below 4%. Some call the phenomenon “golden handcuffs” — golden because the low rates are unbeatable, but handcuffs because the rates keep many people locked into their current homes.

Aging housing

The median age of owner-occupied houses hit 40 years in 2021, according to the Census Bureau. Because of the modest supply of new houses added to the rolls between 2010 and 2021, the share of new construction has dipped to just 10%. At the same time, the share of places at least 42 years old — built prior to 1979 — jumped to 49%.

The aging housing stock “signals a growing remodeling market,” says Na Zhao, an economist with the National Association of Home Builders, as the components in older structures need to be repaired or replaced. Add in the fact that new houses are priced beyond the reach of many would-be buyers, and Zhao suggests the remodeling sector is poised to grow faster than new construction.

Builders dwindling

Not only is the number of for-sale houses dwindling, so is the number of homebuilders. In 2021, national builders boosted their market share to almost 54%, according to trade publication BUILDER. In the 50 largest markets studied, four heavyweight builders had a combined 43% market share on average (though it was not always the same four builders in each market). The concentration is twice that in some locales.

The country’s 10 largest builders owned 95% of the market in Columbia, South Carolina, in 2021, and they had an 87% share in Las Vegas and Indianapolis. They also seem to own most of Florida. The 10 largest builders had 87% of the market in Miami, 81% in Jacksonville, 79% in Fort Myers, 78% in Orlando, 77% in Tampa and 75% in Sarasota.

Keeping watch

About half of all homeowners are using some form of surveillance technology in or around their properties. Or, as Humphrey Bogart once said in “Casablanca,” “Here’s looking at you, kid.” According to a survey by LendingTree, nearly two-thirds of those who use security cameras say their equipment has prevented potential criminal activity, and almost half report reviewing their footage on a daily basis.

Lew Sichelman has been covering real estate for more than 50 years. He is a regular contributor to numerous shelter magazines and housing and housing-finance industry publications. Readers can contact him at