This is Edelman Financial Engine's everyday wealth, with award-winning journalist Soledad O'Brien,

personal finance expert Jean Chatsky,

and Edelman Financial Engine's wealth planner Rose Niam.

The National Association of Realtors

had a report last May, and they said that the cost of purchasing a home in the US has increased 55% from 2021.

Like that's absolutely insane. Now we know mortgage applications are falling.

Can you explain the correlation between home prices and inflation? How are they connected?

Historically, they have moved pretty much in lockstep.

Historically, if you go way, way back, home prices have gone up at about the same rate as inflation. But as you pointed out, this

year it's been wildly different. Yeah, inflation is higher than we've seen in a really long time, but the cost of

purchasing a home in the US is up more than 50% year over year, and there are a lot of

factors that go into that. We've got the

pandemic and the fact that more millennials are entering their home buying

years and the fact that we've got an imbalance of supply and demand.

So all of those things are to blame for this bubble,

if you want to call it that, in prices

that we've seen recently.

Should that variation, or my dad,

would call the delta between those two numbers,

should that matter in your decision

about whether or not it's

the appropriate time to get a second home.

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