Banaian; Reason Central Minnesotans Are Seeing Higher Airfares

The demand for air travel continues to rise and so are the prices.  St. Cloud State Economist and Dean, School of Public Affairs King Banaian joined me on WJON.  He says planes are full and the prices are high... people are determined to travel despite the price increase.  Banaian indicates people's personal savings are declining, we're seeing small increases in GDP, but the unemployment rate is still 3.5%.  He says wages are going up at a significant rate which is even faster than inflation.  Banaian explains that people want to spend money and despite the rising flight costs people are paying it.

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Homes are selling in the St. Cloud area but Banaian indicates not that many homes are going on the market.  He says many people are choosing not to move because they are locked into better interest rates on their mortgage than they could get if they bought a home now.  Banaian says the price of homes that are for sale are higher because demand is higher than the supply.  He says because of the lack of homes on the market the construction of new homes are on the rise.  Banaian indicates the construction of these homes isn't as fast as many people would like because of supply chain issues and the demand on new home construction.  He says we don't normally see high interest rates and a strong construction demand but we are right now.

Malls in many communities are changing.  Banaian says the reason people went to malls was shopping convenience but many Americans' shopping habits have changed and that likely includes some online shopping.  He suggests malls need to give customers a reason to go to the mall for something other than shopping.

If you'd like to listen to my conversation with King Banaian it is available below.