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Shrinking Home Equity: Inflation Outpaces Housing Price Gains

U.S. homeowners are seeing their housing wealth weaken as home price growth fails to keep up with inflation. Realtor.com data shows median listing prices in July rose only 0.5% year-over-year, while inflation climbed 2.7%. This imbalance creates home equity erosion—a situation where homes may be worth more in nominal dollars, but purchasing power declines when adjusted for inflation.

Economists note that while housing often acts as a long-term hedge against inflation, periods of economic stress or elevated inflation can break that pattern. The current trend follows a historic precedent seen during the stagflation of the late 1970s and early 1980s, when home values rose slower than soaring inflation.

Recent years highlight the same volatility: home listing prices surged 13.7% in 2022 but slowed to 2.3% in 2023, then fell 0.4% in 2024. In 2025 so far, prices are down 0.3%. Analysts caution that if inflation continues to outpace housing, homeowners risk reduced equity value, borrowing capacity, and real wealth—even with fixed-rate mortgages. Read More.

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Tariffs Squeeze Small Businesses as Hiring Falls 6.7%

Small business hiring is falling sharply under the weight of rising tariffs and labor shortages, according to new data from the Bank of America Institute. Hiring payments were down 6.7% year-over-year on a three-month moving average in July, marking the third consecutive monthly decline.

The slowdown coincides with a surge in tariff costs: small businesses making direct customs payments have seen those expenses spike by nearly 170% since the start of 2025. While construction and manufacturing hiring has picked up, sectors like retail and services have cut back.

Economist Taylor Bowley noted that small business profitability growth remains positive but is decelerating, with many owners citing poor sales as their top problem. Labor shortages are also pressuring payrolls in industries like restaurants, lodging, and construction.

Unlike larger corporations, small businesses struggle to shift supply chains or absorb tariff hikes, leaving them more vulnerable to inflationary pressures. The result is thinning profit margins, weaker hiring momentum, and rising uncertainty about the path forward. Read More.