Overview: While it was a light week for economic reports, the latest data reinforced the notion that further progress on bringing down inflation may be challenging. As a result, mortgage rates ended the week higher, and housing market activity suffered.
Sales of new homes in April fell 5% from March, which was more than the consensus forecast, and the results for the prior month were revised lower. This brought new-home sales down 8% from last year at this time. The median new-home price of $433,500 was up 4% from a year ago. Builders have been constructing smaller homes and offering financial incentives to buyers to help offset the impact of higher mortgage rates.
With inflation in focus, this month’s Consumer Confidence Index has been receiving more attention lately, since it may provide hints about upcoming changes in spending habits. After three straight months of declines, the latest reading unexpectedly jumped to 102, far above the consensus forecast of 96. According to the report, more people plan to buy autos and big-ticker appliances in the near future.
Another economic report that has been closely watched in recent months also had some influence this week. The Global Services Purchasing Managers' Index (PMI), measuring the strength of the services sectors in over 40 countries, jumped to 54.8, far above the consensus forecast, and the highest level since May 2023. This report raised the investor outlook for future inflation, making it unfavorable for mortgage rates.
New Home Sales (thousands)
Week Ahead
May 31
Personal Income and Outlays
Personal Consumption Expenditures (PCE) Price Index
June 3
Institute for Supply Management (ISM) Manufacturing Index
June 5
ISM Services Index
June 7
Employment Report
Comments