For the week of JULY 7, 2025

“Cure for an obsession: get another one.”—Mason Cooley, American aphorist

Residential construction spending slowed a trifle in May compared to the revised estimate reported for the month before. Homebuilders are curtailing spending as they focus on completions to meet growing buyer demand.

The Mortgage Bankers Association reported applications for mortgages are gaining momentum, up for the second straight week. They noted, “purchase activity still remains 16% higher than last year’s pace.”

Realtor.com believes that “with inventory on the rise and more than 1 in 5 sellers cutting prices, the market is tilting back toward balance, marked by slowing price growth and increasing buyer leverage.”

HALFTIME HIGHS... Thanks to de-escalating trade tensions and resilient economic data, the S&P 500 and Nasdaq finished the first half of the year at all-time highs, and both are now up by nearly 7% year-to-date.

The holiday-shortened week ended with a solid, better-than-expected 147,000 jobs added in June, unemployment ticking down to 4.1%, a big pickup in business spending in May, and the huge services sector back in growth mode.

Encouraging news included a trade deal with Vietnam, reports of Canada’s efforts to renew negotiations with the U.S., and speculation that other trade deals, including one with the EU, could come soon.

The week ended with the Dow UP 2.3%, to 44,829; the S&P 500 UP 1.7%, to 6,279; and the Nasdaq UP 1.6%, to 20,601.

Bonds declined a bit overall, the 30-Year UMBS 5.5% slipping 0.09, to 99.21. In Freddie Mac’s weekly survey, the national average 30-year fixed mortgage rate fell again, staying below its level 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… The National Association of Realtors says nearly half of all home sales now involve seniors. Baby boomers account for 42% of buyers, while millennials make up only 29%, down from 38% a year ago.

MORTGAGE APPLICATIONS, JOBLESS CLAIMS, TREASURY BUDGET... We'll check whether MBA Mortgage Applications continue to gain compared to last year. Economists expect Initial Jobless Claims to remain well below recession levels. They also forecast the Treasury Budget report will show a decline in the federal deficit for June.

Forecasting Federal Reserve policy changes in coming months. Thanks to last week's better-than-expected June jobs report, Fed watchers now forecast a rate cut in September and a hold in October. Note: In the lower chart, the 4.7% probability of change is a 95.3% probability the rate will stay the same. Current rate is 4.25%-4.50%.

Probability of change from current policy:

Create a shutdown ritual to end your workday. Write down tomorrow's to-do list, close the laptop, or just step outside. Ritualizing your end-of-day stops work from creeping into personal time, reducing your stress level.