QUOTE OF THE WEEK
“A person always has two reasons for doing anything: a good reason, and the real one.”—J. P. Morgan, American financier and investment banker
NATIONAL MARKET UPDATE
Sales of new single-family homes kicked off the summer buying season with a small gain in June. Best news: median sales prices have fallen nearly 3% the past year, and are almost 13% below their 2022 peak.
June sales of existing single-family homes dipped a tad, though condo/co-op sales were unchanged. Good to see existing home inventory is nearly 16% higher the past year and approaching the 5 months’ supply of a normal market.
Plus, home sales overall should improve going forward, as applications for purchase mortgages on an unadjusted basis increased by 4% over the prior week, and are 22% higher than the same week a year ago.
REVIEW OF LAST WEEK
BULL RUN… Propelled by earnings momentum and improving trade prospects, Wall Street bulls sent stocks higher for the week, as the S&P 500 and the Nasdaq extended their record-setting streaks.
Last week’s deal with Japan dropped tariffs from 25% to 15% and featured $550 billion of Japanese investment in the U.S. The increasing clarity on tariffs is helping companies plan and resume their investment spending.
Preliminary S&P Global PMI reads for July showed manufacturing activity slightly contracting, but the dominant services sector increasingly expanding. Plus, low initial jobless claims indicated a solid labor market.
The week ended with the Dow UP 1.3%, to 44,902; the S&P 500 UP 1.5%, to 6,389; and the Nasdaq UP 1.0%, to 21,108.
Bond prices moved ahead a tad overall, the 30-Year UMBS 5.5% finishing UP 0.05, at 99.10. Freddie Mac reported the national average 30-year fixed mortgage rate “down slightly from last week,” and lower than a year ago. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information.
DID YOU KNOW… Buyers are getting more bargaining power and more options. In June, active listings on Zillow hit a five-year high and almost 27% had a price cut, the highest share for that month since 2018.
THIS WEEK’S FORECAST
HOME PRICES, CONTRACTS, CONSTRUCTION SPENDING, INFLATION, JOBS, THE FED… Home price gains should keep moderating in both the May S&P Case-Shiller and FHFA Indexes. Analysts forecast the June Pending Home Sales measure of signed contracts on existing homes will post a gain. Construction Spending should increase overall for June and we’ll check the residential part. Economists predict PCE Prices will show modest inflation and new Nonfarm Payrolls will grow in June. Yet no one expects the Fed’s FOMC Rate Decision will be rate cut.
FEDERAL RESERVE WATCH
Forecasting Federal Reserve policy changes in coming months. Even though last Thursday the President said he thinks Chair Powell is “going to do the right thing” at this week’s meet, Wall Street isn’t expecting a rate cut until September. Note: In the lower chart, the 3.1% probability of change is a 96.9% probability the rate will stay the same. Current rate is 4.25%-4.50%.
| AFTER FOMC MEETING ON: | CONSENSUS |
| Jul 30 | 4.25%-4.50% |
| Sep 17 | 4.00%-4.25% |
| Oct 29 | 4.00%-4.25% |
Probability of change from current policy:
| AFTER FOMC MEETING ON: | CONSENSUS |
| Jul 30 | 3.1% |
| Sep 17 | 61.7% |
| Oct 29 | 30.0% |
BUSINESS TIP OF THE WEEK
You don’t need to do more—you just need to be more intentional with what you’re already doing. When you pause long enough to clarify your intention, you bring in a different energy—one that reflects your values, not just your to-do list. When your attention is scattered, so is your power.
