Inflation: Phoenix and Atlanta see costs surge the most

Yahoo Finance Live checks out the surges seen in economic data concerning adjustable mortgage rate demands, regional inflation data, housing prices, and the travel industry.

Video transcript

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- Homebuyers are doing all they can to afford houses in this pricey market. Now as a result, adjustable rate mortgage-- ARMs-- are getting more popular as demand soars, hitting a 14-year high. Now applications for the riskier loan jumped as the fed raised rates last week and prepares for additional hikes this year of adjustable rate mortgage, increasing to 11% of overall loans. Putting this in perspective, that's the highest share for ARMs since March 2008.

- With interest rates about to get a lot worse. Interesting. We're still peeling back the layers on the massive inflation number from the month of April. Prices increasing 8.3% from a year ago. Still near a 40-year high. And that's impacting everything we eat, everything we drink, everything we do, or plan to do in the months ahead. Namely travel. But it also has the potential to remake the map in terms of affordability.

Here are the cities suffering the most right now. Phoenix and Atlanta, cities that were ordinarily towns that you move to because of their affordability. Well that is changing. We've told you before about the Phoenix real estate. It's been up 30%-- prices up 30% on annual basis in terms of inflation.

They are number one on the list in terms of major cities, and you can see the number there-- 11%. If the nation is at 8.3%, they're at 11%. And Atlanta at 10.8%. So I just can't help but wonder if people are going to put the brakes on in terms of moving to those towns because of their affordability. They are unaffordable at this point, in particular Phoenix.

- Yeah, you certainly think it would because people are really feeling the pinch already. And when you talk about it, it's almost affecting it seems like every single aspect of your life.

- Yeah.

- When you go to the grocery store you're paying more for a slew of products. I mean, overall groceries up nearly 11% in the past year. You're paying 11% more for your groceries than you were just a year ago. Cost of cereal and baked goods jumping just about 10% in the past year. To get there you're going to drive. Taking a look at gas prices, they are clearly soaring.

At a new record, the average price nationwide $4.40 a gallon, up $0.03 from just yesterday. Up $0.18 from two weeks ago. Up $0.30 from a month ago, Rochelle. So certainly Main Street America-- millions and millions of Americans-- faced with higher costs every single day.

- And I mean, you really can't catch a break, even if you're trying to plan for a getaway for the upcoming holidays, if you're trying to get away for summer break, airfares 33% higher in April compared to a year ago and up more than 18% from March. Now this is according to the Bureau of Labor Statistics. They said that's the steepest monthly gain they've seen since they started doing consumer price data back in 1963. And it's the largest annual price increase since 1980.

Even if you look at the average price of a domestic round-trip flight this summer, $383 according to Hopper. You're trying to drive somewhere, it's too expensive. You're trying to fly somewhere, you're trying to pay for summer camp. All these little things are adding up. It's having a lot of people around the kitchen table wondering how on Earth am I supposed to do anything this summer?

- Yeah and some things you have to get. I mean, when you talk about meat, poultry, fish, and eggs, that to me is the biggest number-- 14% on an annual basis they have increased. So the food number actually looks deceiving. People have to continue to buy those. Will they continue to fly? Will that demand stay high into the summer months and even Memorial Day weekend? I think Americans have to be making some tough decisions about vacations.

- Americans certainly are and you also have to feel a bit for the travel industry. We know that the airliners are the ones who are raising prices but this is an industry that was hit terribly from the pandemic. They're beginning to recover, still some pockets of weakness, so higher costs for Americans in their everyday life. They're going to make some tough decisions and vacations could be one of the first things to go, Rochelle.