Despite rapidly increasing house prices, inflation in New England remains among the lowest in the nation, at 2.1 percent compared to 3.2 percent nationally, according to the latest Economic Conditions Report from the Federal Reserve Bank of Boston.
The Boston Fed said costs rose for housing, food, transportation, and medical prices, while “all other expenditure categories experienced a year-over-year decline.”
Regionally, house prices increased 10.1 percent in the last quarter of 2023, compared to 6.4 percent nationally. In the region and nationally, Rhode Island recorded the highest appreciation increase at 15 percent, as measured by the Federal Housing Finance Agency (FHFA) House Price Index.
The Boston Fed attributed rapidly increased house prices to “low housing inventory.”
University of Rhode Island economist Len Lardaro, while questioning the housing numbers, agrees that the economy is doing well.
“The aggregate numbers are very very good,” Lardaro said. “Productivity is really going to start jumping.”
When asked why many consumers are pessimistic about the economy while economists say the U.S. economy is the best worldwide, Lardaro said, “People and economists look at things differently. The recovery is not treating income levels equally.”
The Boston Fed also noted that in March, the Conference Board’s Consumer Confidence Index rose slightly from the previous year both in New England and nationwide. However, for different reasons. Regionally, consumer confidence rose because of “improved future expectations,” while nationally, consumers had a “more positive outlook about the present.”
“Consumers in March indicated an uptick in worries about food and gas prices,” the Boston Fed said. “However, concerns about gas prices have been trending downward generally, while alarm for the U.S. political environment has increased.”
Here are some of the Boston Fed’s other observations:
- The region experienced “robust employment growth in February 2024,” adding 9,000 jobs during the month, exceeding pre-pandemic levels.
- Education and the health services sectors were leaders in job growth.
- In February 2024, New England’s unemployment rate was 3.4 percent, below the national rate of 3.9 percent.
- Office rents remained stable in the Boston area, while office vacancies rose.
