For the week of JUNE 23, 2025

“When my mother had to get dinner for 8, she’d just make enough for 16 and only serve half.”—Gracie Allen, American vaudevillian, singer, actress, and comedian

May saw a modest increase in single-family home starts, though starts overall declined (solely from a drop in the volatile multi-family segment). Completions grew 5.4%, hitting above the 1.5 million annual rate 11 of the last 12 months.

That resulted in the largest inventory of completed single-family homes since 2009. It also pushed new building permits down a bit in May, as builders focused on buyer incentives to sell their completed projects.

A national data firm reports that over a recent four-week period, only 28% of homes sold above asking price, another sign of a buyer’s market. In comparison, 53% of homes sold above listing price in the seller’s market three years ago.

WAIT AND SEE... Wednesday the Fed left the rate unchanged, sticking by its wait-and-see stance on the economy. Traders followed suit, leaving the three major stock indexes essentially flat at the end of the holiday-shortened week.

The Israel-Iran conflict also made Wall Street cautious. Plus, May's Leading Economic Index (LEI) and Retail Sales both dropped, although the latter was seen as payback for tariff front-running earlier in the year.

But Initial and Continuing Unemployment Claims fell for the week, the Fed kept to its estimate for two rate cuts by the end of the year, and on Friday, one Fed governor floated the possibility of a rate cut in July!

The week ended with the Dow UP just 9 points, to 42,207; the S&P 500 down 0.2%, to 5,968; and the Nasdaq UP 0.2%, to 19.447.

Bonds inched ahead overall, though the 30-Year UMBS 5.5% ended down 0.07, at 99.04. The national average 30-year fixed mortgage rate moved down again, reaching a four-week low, in Freddie Mac’s weekly survey. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information.    

DID YOU KNOW… Realtor.com finds “today’s market more buyer-friendly than a year ago.” They note, “new listings are rising, inventory is rebounding, and prices are holding steady,” while “consumer confidence is also increasing.”

NEW, EXISTING, PENDING HOME SALES, HOME PRICES, INFLATION... A  big week for May housing data. Both New Home Sales and Existing Home Sales are expected to dip slightly for the month. But the Pending Home Sales index of signed contracts on existing homes is forecast to rebound, Economists predict home price growth will continue to moderate in the April S&P Case-Shiller Home Price Index. Finally, inflation should continue to slow in May, according to PCE Prices, the Fed's favorite inflation measure.

Forecasting Federal Reserve policy changes in coming months. Wall Street expects the Fed to stand pat for another meeting, then cut a quarter point in September, and hold again in October. Note: In the lower chart, the 16.5% probability of change is an 83.5% probability the rate will stay the same. Current rate is 4.25%-4.50%.

Probability of change from current policy:

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