Hello, this is Chris Nash with your monthly market update. While it was a quiet week/month, key insights came from the Fed minutes, unemployment claims, and appreciation data.
First from the Fed: Minutes from their June meeting showed members disagree on when to cut rates. For now, the Fed is keeping its benchmark Fed Funds Rate unchanged, balancing stable prices with employment. Reminder: this rate influences overnight lending between banks, which then impacts broader interest rates across the economy, though it doesn’t directly set long-term rates like mortgages.
A solid job market, like the surprising June report from the Bureau of Labor Statistics, supports keeping rates steady at the Fed’s July meeting. Markets currently expect a cut in September, and most Fed officials still project two cuts this year.
However, we are seeing some signs of cooling in the job market. Continuing jobless claims have been stubbornly high for over a year, now consistently above 1.9 million for seven straight weeks. This suggests hiring isn’t keeping up with the number of people looking for work.
In housing, home prices were appreciated in May, up nearly 2% from last year according to data from Cotality and ICE. While the pace has slowed, experts are optimistic, with Cotality forecasting over 4% appreciation in the next year. This shows how buying a home is a smart way to build wealth; a $500,000 home could gain $20,000 in value in just one year with 4% appreciation.
If you have questions about housing opportunities this summer, please reach out.
