centers. these shifts in demand happened much more rapidly than the response in housing supply. as a result, rents increased quite significantly. we have not seen a decline in housing services inflation, but there are indications that we soon will. to see this, consider figure 5. because rental agreements tend to be renewed infrequently ( often only once a year ), average rents ( the black line ), which is what the pce price index measures, tend to lag market rents ( the green, blue, and red lines ), the rent i would pay if i were to sign a new lease as a new tenant. for this reason, market rents are a leading indicator of how overall rents and housing services prices are likely to change over the next 6 to 12 months. market rents are now increasing much more slowly than over 2021 and much of 2022, suggesting that housing services inflation will eventually slow. lastly, inflation in other core services, the red line back in figure 3, is a large category that covers activities as varied as travel and recreation, and medical and legal services. inflation for these services has remained stubbornly high. as other governors and i have noted in the past, an important source of inflation pressures in this category has likely been the shortage of workers, which has pushed up labor costs at rates above those consistent with 2 percent inflation. the inflation outlook for this nonhousing category of core services partly depends on whether growth in nominal labor costs comes back down, and recent data suggest that labor compensation has indeed started to decelerate somewhat over the past year. although i have focused on core inflation because it is more useful for assessing trends in inflation, we also closely follow food and energy prices given that our target is for total inflation and that food and energy prices are very important for many households. both food and energy inflation rose sharply following the russian invasion of ukraine. but more recently, food inflation has slowed somewhat, as global food prices have retraced some of their earlier increases, while energy prices have fallen noticeably. because energy prices are shaped primarily by global developments and not by u. s. monetary policy, there is a lot of uncertainty about the future course of energy inflation. in summary, core goods inflation has started to come down. several indicators suggest that housing services inflation is likely to come down in the coming months. there is more uncertainty surrounding inflation in core services excluding housing. over time, we ’ ll learn more about inflation dynamics in this sector. benefits

, while avoiding the mistakes of the recent past? achieving credit quality and availability some would argue that most of the really risky behavior is now out of the market. but, unfortunately, the backlash has restricted a lot of perfectly responsible lending as well. banks are reluctant to put any but the lowest possible risk loans in their portfolios. and the market for new private mortgage loan securitizations is essentially closed. thus, borrowers face tight underwriting requirements, even if their own risk profile looks relatively “ safe ” by historical standards. moreover, even homebuyers with the requisite down payment realize that their home equity is much less liquid than in the past. once, borrowers could count on cash - out refinancing or home equity lines of credit as a means of cheaply accessing their home equity ; robert b. avery, neil bhutta, kenneth p. brevoort, glenn b. canner, and christa n. gibbs, “ the 2008 hmda data : the mortgage market during a turbulent year, ” ( draft ). article forthcoming in the federal reserve bulletin. in 2008, the reported hmda share of fha - insured home loans was 21. 5 percent. the percentage of hmda reported fha loans had not reached nearly 20 percent since 1990 ( 18. 1 ). national association of realtors profile of homebuyers and sellers. the national association of realtors, “ 2009 housing opportunity pulse survey. ” the nar annual telephone survey of 1000 adults shows “ … eight in 10 ( borrowers ) still consider having enough money for downpayment and closing costs to be the biggest obstacle to buying a home. ” these avenues are now much more restricted. a risk - averse renter might prefer to keep his assets readily available rather than lock them up in a house. on balance, even taking into account the excesses of the bubble period, it appears that lenders have now tightened underwriting terms so much that the lack of credit availability is at least partially an impediment to homeownership. as we work to correct the problems of the recent past, we must keep in mind the importance of access to credit. if anything, the recent mortgage meltdown and sharp pullback in lending only demonstrates how critical it is for the economy to have a well - functioning housing finance market. with the old mortgage system in disarray, we are, one hopes, within sight of