Last week saw several key economic developments. These included updates on inflation, new home sales, pending home sales, and consumer sentiment. Additionally, Federal Reserve Chair Jerome Powell delivered a speech at a banking conference in Spain. Weekly reports on mortgage rates and jobless claims were also published.
New Home Sales Rise, Pending Home Sales Fall
The May reports on new and pending home sales revealed a mixed picture. On a seasonally-adjusted annual basis, analysts anticipated 763,000 new home sales, while April’s year-over-year figure stood at 680,000. However, May saw a significant increase in new home sales, the largest since February 2022. This marked the third consecutive month of growth. Meanwhile, the supply of new homes available for sale declined by 11.80 percent between April and May, resulting in a seven-month supply. Strong sales were observed in the Northeast and West regions. Conversely, pending home sales experienced a decline of -2.70 percent in May.
Mortgage Rates and Jobless Claims
Last week, Freddie Mac reported higher average mortgage rates. The average rate for 30-year fixed-rate mortgages rose by four basis points to 6.71 percent, while the average rate for 15-year fixed-rate mortgages increased by three basis points to 6.06 percent.
Chair Powell’s Speech and Consumer Sentiment
During the banking conference in Spain, Federal Reserve Chair Jerome Powell discussed the U.S. economy, highlighting the Fed’s response to the financial downturn following the Great Recession. He also addressed current economic trends, including the impact of higher mortgage rates on the housing sector and the low unemployment rate. Powell outlined the Fed’s objective of reducing inflation to 2.00 percent per year, as it currently hovers around 4.00 percent. He acknowledged challenges in achieving this goal, such as tighter credit requirements for individuals and businesses. Additionally, Powell cautioned that further tightening measures may result from the stresses experienced by banks in March. In terms of consumer sentiment, the June index reading remained relatively stable at 64, compared to May’s reading of 63.99. An index reading above 50 indicates that most consumers are confident about current economic conditions.
What to Expect
Looking ahead, this week’s economic calendar includes reports on construction spending, public and private sector employment, and the release of minutes from June’s Federal Open Market Committee meeting. Additionally, weekly updates on mortgage rates and jobless claims will be provided.
