For the week of AUGUST 25, 2025

“A rich person is nothing but a poor person with money.”—W. C. Fields, American actor, comedian, juggler, and writer

Existing Home Sales rose 2% in July, and posted an annual gain for the first time since January. The National Association of Realtors said that with roughly flat price growth, “homebuyers are in the best position in more than five years.”

Housing Starts also surprised to the upside in July, up over 5%, the fastest pace in five months and nearly 13% ahead of a year ago. New Building Permits declined a tick, as builders focused on completions, which were up 6% in July.

Fannie Mae’s latest survey of mortgage lenders found a growing number of senior executives think the economy is on the right track. And many are focused on streamlining processes for quicker turnaround times.

THANK YOU, CHAIR POWELL... A challenging week ended with a Friday rally after Fed Chair Powell's speech at Jackson Hole boosted the probability of a September rate cut, sending two of the three major indexes up for the week.

Powell's comments implied we could be heading for a major easing cycle for rates beyond next month. He also indicated he wasn't too worried that any inflation caused by tariffs would last.

Some major retailers reported better-than-expected Q2 earnings, showing a resilient consumer, while August reads for the S&P Global U.S. Manufacturing and Services PMIs revealed an economy that's still expanding.

The week ended with the Dow UP 1.5%, to 45,632; the S&P 500 UP 0.3%, to 6,467; and the Nasdaq down 0.6%, to 21,497.

On the week, bonds prices rose overall, but the 30-Year UMBS 5.5% fell 0.75, to 99.31. The national average 30-year fixed mortgage rate held at its 10-month low 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… Mortgage applications for new home purchases rose 7% in July and are up almost 7% from a year ago. During the month, about 62% of builders offered some form of concession.

HOME SALES, HOME PRICES, INFLATION... For July, New Home Sales should gain and Pending Home Sales (the index of signed contracts on existing homes) should rebound into positive territory. The June S&P Case-Shiller Home Price Index is predicted to report the continued slowing of price growth. Economists believe inflation will stay in check as measured by July PCE Prices, the Fed's favorite index.

All U.S. financial markets will be closed next Monday, September 1, in observance of Labor Day.

Forecasting Federal Reserve policy changes in coming months. Now the consensus on Wall Street is for a Fed rate cut next month, a hold in October, then another cut in December. Note: In the lower chart, the 87.2% probability of change means there's only a 12.8% probability the rate will stay the same. Current rate is 4.25%-4.50%.

Probability of change from current policy:

Everyone experiences failure. But successful people treat failure as a stepping stone to success—analyzing what went wrong, learning the lesson, adjusting their strategy, and trying again. They're willing to learn, pivot, adapt, and persevere.