May’s home price index readings were mixed. Mortgage application submissions decreased. New home sales slipped in June, jobless claims decreased, and the GDP estimate was higher than expected. Pending home sales climbed, inflation cooled, personal income fell, and consumer spending climbed higher.
While the current market sentiment suggests no further rate hikes, during a press conference following this rate raise, Fed Chair Powell emphasized that core inflation remained unacceptably high, and the Fed remained committed to its 2% target.
The Housing Market May Be Approaching A Soft Landing
As of mid-July 2022, the average cost of a single-family home in the U.S. was $450,000. According to Altos Research, that data is basically unchanged from 2022. And, inventory is on the rise—slowly. There were 470,000 single-family homes for sale in the U.S. during the same time period. That trend increased by 1% from the week prior.
“Since January, homebuyers have defied all expectations. Sellers have not materialized and buyers have been buying everything that becomes available,” said Altos Founder, Mike Simonsen.
There aren’t many listings to go around, but agents have made it clear that they don’t believe these market conditions are here to stay. There is a light at the end of the tunnel.
Other Market Updates:
- Continuing jobless claims were at a level of 1,690,000 during the week ending 7/15, a 60,000 decline from the week before. Initial jobless claims declined as well, falling by 7,000 to end at a level of 221,000 during the week ending 7/22.
- The GDP estimate for quarter two climbed 2.4%, a higher-than-expected increase. This strong data in combination with jobless claims influenced higher rate trends.
- Mortgage application submissions fell a composite 1.8% during the week ending 7/21. Refinance application submissions slipped 0.4% and purchase application submissions decreased 3%.
- New home sales were at a seasonally adjusted annual rate of 697,000 in June, a 2.5% decline from May. Though the decline was lower than expected, it comes after a nice surge in May.
- Despite an expected decrease, pending home sales inched up 0.3% in June.
- Annual inflation on the index saw a drop to 4.1% from 4.6% the month before—this is the lowest annual level in two years. Personal income was below expectations in June, rising 0.3% vs. the 0.5% expected. Consumer spending increased 0.5% in June—a notable increase from 0.2% the month before and the 0.4% expected
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