| “Economics is extremely useful as a form of employment for economists.”—John Kenneth Galbraith, Canadian-American economist |
| New home sales jumped more than 20% in August, up more than 15% from a year ago. Plus, median sales prices are down more than 10% from their 2022 peak, and the supply of completed homes is at its highest level since 2009. Existing home sales stayed essentially unchanged in August. But inventories have risen almost 12% the past year, giving buyers more options, while the median price declined for the month, though it’s still up a smidge from a year ago. Realtor.com notes: “This fall is shaping up to be the most buyer-friendly market in nearly a decade, with more listings and motivated sellers,” adding “buyers may find a rare sweet spot of opportunity.” |
| CHOPPPY… Stocks plowed through a week of alternating record highs and pullbacks. But the three major indexes ended with only modest losses, as traders digested differing Fed comments and strong economic data. Fed views ranged from one member who doesn’t see a recession and might not favor a series of additional rate cuts, to another who said he’d like a fed funds rate that was almost two percentage points lower than present policy. Meanwhile, Q2 GDP saw the economy grow 3.8%, jobless claims fell, business spending jumped, and PCE inflation is up a modest 2.2% the past six months (five with higher tariffs), while consumer spending and income rose. The week ended with the Dow down 0.1%, to 46,247; the S&P 500 down 0.3%, to 6,644; and the Nasdaq down 0.7%, to 22,484. Bonds also edged south, the 30-Year UMBS 5.0% down 13 basis points, to 99.04. Following several weeks of decline, the national average 30-year fixed mortgage rate inched up 4 basis points in Freddie Mac’s Primary Mortgage Market Survey. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information. DID YOU KNOW… The median list price for a fixer-upper is $200,000, less than half the $436,250 median for all single-family homes. No wonder searches on Realtor.com for “fixer-upper” in July were three times higher than in 2021. |
| HOME SALES, PRICES, CONSTRUCTION SPENDING, JOBS… Analysts expect the Pending Home Sales report will show a small increase in signed contracts on existing homes in August. The Case-Shiller Home Price Index is forecast to register slower price growth in July. Construction Spending should gain a bit overall in August, and we’ll check the residential part. Economists predict September data will reveal a modest increase in Nonfarm Payrolls and Average Hourly Earnings, and no change in the currently low Unemployment Rate. |
| Forecasting Federal Reserve policy changes in coming months. The futures market still expects two more rate cuts to close out 2025, then a hold in January. Note: In the lower chart, the 89.3% probability of change means there’s only a 10.7% probability the rate will stay the same. Current rate is 4.00%-4.25%. |
| AFTER FOMC MEETING ON: | CONSENSUS |
| Oct 29 | 89.3% |
| Dec 10 | 66.6% |
| Jan 28 | 46.1% |
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The Jim Passi Team at Citywide Home Loans proudly serves Illinois, Wisconsin, Michigan, Indiana, Georgia and Flordia. If you are looking to buy a home or refinance, we have you covered. Apply Now to get started.
