I was asked recently what I thought inflation meant to housing in Lubbock. I’ve talked in the past about the supply constraint, particularly in terms of Months of Inventory. Let me say that I think the recent increase in MOI has as much to do with buyers receding from the market as it does from new supply. Inflation (or at least increased interest rates) shows up in mortgage application volume and in resulting housing payments. But inflation shows up in housing choices outside of single-family ownership. Rents in Lubbock have increase YoY by ~8.7% (on a per SF basis) while occupancies have been stable. Moreover, the underlying fundamentals related to household-formation and demographics continue to provide support for housing demand. So, even in a rising-rate environment and rising cost environment, I believe we will still see strong demand. Let me say it this way – if a balanced market is 6 MOI, and we’ve spent a few years under 2 MOI, I think we are much more likely to center on a 4 MOI than on a 10 MOI.

In that vein, our Mover’s Moving Index turned in a strong 262 number for May.