There’s been plenty of talk (there always is) about the housing bubble. Pundits squawk about inflation and real estate prices, while panicky consumers scratch their heads wondering if they should buy, sell or hold. Every day, a new economic indicator about inflation, interest rates, new home starts and housing prices is released. Rather than demystifying the market, these numbers usually add fuel to the fire, leaving buyers and sellers at the mercy of talking heads.

Inflation is the overall upward trend in the cost of goods and services. Over time, as those costs increase, the value of a dollar falls because the consumer cannot purchase as much with that dollar as in the past. Inflation is officially measured by the Consumer Price Index and the Producer Price Index, but it’s as easily understood by the cost of a gallon of gas today, versus a year ago.
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