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- Fed’s preferred inflation metric edges down
Fed’s preferred inflation metric edges down
Plus: Pending home sales plummet to all-time low in May
Welcome to Monday — and hello, July!
Today’s newsletter is 629 words, a 2.5-minute read.
Disclaimer: Average mortgage rates as of June 28, 2024. © MND's Daily Rate Index.
1. Typical home now selling for less than list price
For the first time in about four years, U.S. homes are selling for less than their asking prices. During the four weeks ending June 23, homes sold for 0.3% below their asking price, according to Redfin.
This is a shift from the past two years when homes sold at or above their list prices. The increase in homes selling below asking price is due to higher supply than demand in certain areas.
New listings have risen by 8.2% year over year, while pending home sales have decreased by 4.3%. Over 60% of homes remain listed for at least a month without going under contract.
2. Fed’s preferred inflation metric edges down
An important economic measure for the Federal Reserve showed Friday that inflation during May slowed to its lowest annual rate in more than three years. Inflation eased to 2.6 per cent keeping the central bank on course for at least one interest rate cut this year. The Fed’s inflation target is 2 percent a year.
“The lack of surprise in today’s inflation number is a relief and will be welcomed by the Fed. However, the policy path is not yet certain. A further deceleration in inflation, ideally coupled with additional evidence of labor market softening, will be necessary to pave the way for a first rate cut in September.”
3. More Nuggets
🤺 The legal battle between NEXA co-founders continues. (NMP)
🏡 FHFA announces inaugural members of Federal Advisory Committee on affordable, equitable, and sustainable housing. (FHFA)
💳 Average consumer credit score remained stable in May. (VantageScore)
🏘️ Cheap mortgages are forcing millions of homeowners to stay put. That is becoming a problem well beyond the property market. (WSJ)
4. How much it costs to sell a home
Buying and maintaining a home is expensive, and selling one can be costly too. According to a Clever Real Estate report, it typically costs $54,616 to sell a house in 2024. Almost 42% of surveyed home sellers found their selling costs higher than expected.
"When people think about selling their home, they’re thinking about how much money they’re going to make from their home sale, and not how much they’re going to spend... That cost does end up being very high and then they’re caught off guard and disappointed because that’s going to take a cut out of their profit."
In May, Clever Real Estate polled 1,014 Americans who sold a home between 2022 and 2024 about their attitudes related to the home-selling process. It also conducted an analysis of seller costs based on median real estate prices in May.
5. Pending home sales plummet to all-time low in May
According to the National Association of Realtors, pending home sales declined in May for the second consecutive month, reaching a record low. The Pending Home Sales Index (PHSI) dropped 2.1% from April to May, and 6.6% year-over-year, hitting 70.8. Experts attribute this to mortgage rate volatility.
Pending home sales fell year-over-year in all four major regions, with the South experiencing the largest yearly decline at 10.4%. Month-over-month, sales were down in the Northeast (-1.1%), Midwest (-0.4%), and South (-5.5%), while the West saw a 1.4% increase but still a 2.1% yearly decline.
☀️ You’re all caught up. See you on Wednesday!
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