Inflation rose at a pace of 0.20 percent in July and met analysts’ expectations. There was no change in the pace of month-to-month inflation from June’s reading of 0.20 percent growth. The Consumer Price Index also reported that year-over-year inflation reached 9.10 percent, which was the highest reading since reaching a 40-year high in mid-2022.
Last week’s scheduled economic reporting included readings on construction spending, public and private sector payroll growth, and the national unemployment rate. Weekly readings on mortgage rates and new jobless claims were also released.
The Consumer Price Index for June rose 0.20 percent in June as compared to May’s reading of 0.10 percent growth and expectations of 0.30 percent month-to-month growth. The core CPI reading, which excludes volatile food and fuel sectors, fell to 0.20 percent growth in June as compared to May’s month-to-month reading of 0.40 percent growth.
Freddie Mac reported higher average mortgage rates last week. The average rate for 30-year fixed-rate mortgages rose by four basis points to 6.71 percent; the average rate for 15-year fixed-rate mortgages rose by three basis points to 6.06 percent.
The top three cities with the highest home price growth rates as reported in April’s S&P Case-Shiller’s 20-City Home Price Index were Chicago, Illinois with a year-over-year home price gain of 4.10 percent; Atlanta, Georgia posted a year-over-year home price growth of 3.50 percent.
Federal Reserve policymakers left the Fed’s current interest rate range unchanged at 5.00 to 5.25 percent; the Fed decision was announced after a scheduled meeting of the Fed’s Open Market Committee ended on Wednesday.
Last week’s scheduled economic news included results from Fannie Mae’s National Housing Survey and weekly readings on mortgage rates and jobless claims.
Homeowners took a “wait and see” position as mortgage rates rose and concerns over the economy persisted. Those who refinanced their mortgages to low rates during the pandemic weren’t looking to buy new homes or refinance at current mortgage rates near seven percent. Prospective homebuyers faced affordability challenges and concerns over buying at the top of their local real estate markets.
The U.S. Labor Department reported the month-to-month pace of inflation rose by 0.40 percent in April and matched analysts’ expectations. April’s reading surpassed the March reading of 0.10 percent month-to-month inflationary growth. Inflation rose by 4.90 percent year-over-year in April. Analysts expect inflationary growth to continue, but at a slower pace through 2023.
Last week’s economic news included reporting on construction spending, the Federal Reserve’s decision to raise its benchmark interest rate, and weekly readings on mortgage rates and jobless claims.