Fed Week: Let's start with the biggest. The Fed kept rates as-is, but 3 members voted for a rate hike. It's worth keeping in mind that the Fed doesn't normally do a one-off rate hike, so once that trends begin we're likely to see a few.
Warsh's commentary stirred the markets more than the decision. He called this not a pause but a rigorous review, and it's the beginning of a story, not the end. The markets didn't like that.
Let's Talk Inflation: June PCE fell .1% MOM, bringing us from 4.1% to 3.7% annualized inflation. Core PCE rose .1%, though, and these are all still well over the 2% Fed goals. Their lack of increases are what have the markets doubting the Fed's credibility in taming inflation.
GDP came out showing 1.5% for the quarter annualized, under the 2.1% consensus. Gains came in consumer spending, and business investment.
What about the buying homes? The other data actually tells the more interesting story. We had personal income rising by only .2%, while spending rose .4%. Personal savings fell by 2.7%, the lowest since 2022. So wages being outperformed by inflation, with savings fall, go a long way towards the Consumer Board's consumer confidence falling to 92.2.
That lack of confidence and ability to purchase doesn't play well with...
Devilish Rates: We hit 6.66%. Never a good number, but in this case also almost up to last year's numbers. Mortgage applications fell by 6%, with refi's down 10%. No surprise. So the rate portion of that monthly payment increased...
Home appreciation: And so did home prices. We had 2.2% and 1.1% increases from FHFA and Case-Shiller, respectively. We continue to see a trend with divergence from the southwest and the rest. Middle Atlantic was up 4%, Pacific was down .3%.
Builder Concentration: One last interesting article, as Berkshire Hathaway finalizes their purchase of Taylor Morrison. Per NAHB, 43.6% of new home sales were from the top 10 builders. But in the top 50 Metros? They're 78.9% of those new home sales. In Tucson, they're 99.5% of new home sales.