Note that week starts with a federal holiday on Monday, although Juneteenth will not be universally observed. Some employers will give the holiday in the July 3 week to make a four-day weekend of July 1-4. US bond and stock markets will be closed for the federal holiday.
The outcome of the June 13-14 FOMC meeting left the outlook for rates unsettled. While the Committee opted to pause at the current 5.00 percent-5.25 percent fed funds target range, policymakers declined to offer forward guidance while they await more evidence of the impact of past rate hikes on inflation pressures. Moreover, the Summary of Economic Projections (SEP) suggested that most policymakers are prepared to raise rates further – perhaps another 50 basis points – and keep rates higher for longer. This is a disappointment for those interest rate sensitive sectors that have been anxious to see rates come down. Chair Jerome Powell was emphatic in his comments to the press on June 14 that getting inflation down to the 2 percent flexible average inflation target is the FOMC’s unanimous goal, although there may be differences on the speed and/or level at which rates need to be.
After the FOMC decision, housing sector data set for release in June 19 week will read as backward looking in the face of tight and possibly still tightening credit conditions likely to drive mortgage rates higher in the short-term.
The NAHB/Wells Fargo housing market index for June provides the most current of the data coming out. The May index rose 5 points to 50 due to narrow inventories of homes to buy that have helped keep homebuilders working despite higher mortgage rates and still elevated prices. When the June report is released at 10:00 on Monday, some of that momentum may have been lost with rates rising a bit again. However, it should remain above recent lows and show the housing market bottomed out in late 2022.
The May data on housing starts and building permits issued in May at 8:30 ET on Tuesday should be consistent with the present circumstances. Current homeowners are not moving, thus limiting existing homes coming on to the market. As a result, new construction is holding up better than it might have otherwise.
Sales of existing homes in May at 10:00 ET on Thursday should reflect the constraints of low inventories and challenging home affordability while prices remain elevated and mortgage rates the highest in decades.
