The housing market took center stage this week. The week began with an eye-catching plunge in home builder sentiment. July's NAHB Housing Market Index dropped 12 points to 55, the second largest monthly decline on record behind April 2020's pandemic-induced collapse. There was not a bright spot to be found in the underlying details, with measures of buyer traffic and single-family sales, both present and future, posting substantial declines. For most of the past two years, home builders have been navigating a rising cost environment, namely for building materials, labor and land. However, the straw that breaks the back of builder sentiment now appears to be higher financing costs. According to Freddie Mac, the average 30-year mortgage was 5.54% during the week ended July 21, a jump from the 3.22% averaged during the first week of 2022.
The downturn in home builder confidence provided an early clue that June's data for new home production would surprise to the downside. Total housing starts declined 2.0% to a 1.559 million-unit pace during June, below consensus estimates for a modest increase following May's sharp contraction. Single-family starts dropped 8.1%, the fourth consecutive monthly decline. Single-family starts are now running at a 982,000-unit pace, which is a bit higher than the sluggish pace registered for much of the decade predating the pandemic, but still the slowest since June 2020. The sharp rise in borrowing costs is clearly leading home builders to scale back production plans, with single-family permits recently taking a downward trajectory. Single-family permits dropped 8% in June, the fourth consecutive drop.
28 January 2021 Economic Outlook Report
Wells Fargo Economics & Financial Report / Feb 08, 2021
In our recently released second report in this series of economic risks, we focused on the potential of demand-side factors to lead to significantly higher U.S. inflation in the next few years.
This Week's State Of The Economy - What Is Ahead? - 24 February 2023
Wells Fargo Economics & Financial Report / Feb 28, 2023
Existing home sales declined 0.7% in January, while new home sales leaped 7.2%. Real personal spending shot higher in January, and solid growth in discretionary spending suggests continued consumer resilience.
This Week's State Of The Economy - What Is Ahead? - 11 August 2023
Wells Fargo Economics & Financial Report / Aug 15, 2023
During July, both the headline and core Consumer Price Index (CPI) rose 0.2%. On a year-over-year basis, the core CPI was up 4.7% in July. Recent signs have been more encouraging, with core CPI running at a 3.1% three-month annualized pace.
This Week's State Of The Economy - What Is Ahead? - 24 June 2022
Wells Fargo Economics & Financial Report / Jun 25, 2022
The biggest economic news was Fed Chair Powell presenting the Federal Reserve\'s semiannual Monetary Policy report to Congress this week.
This Week's State Of The Economy - What Is Ahead? - 10 March 2023
Wells Fargo Economics & Financial Report / Mar 14, 2023
Financial markets were looking for validation that January\'s unexpected strength was not a fluke and that the downward slide in economic momentum experienced late last year had stabilized.
This Week's State Of The Economy - What Is Ahead? - 20 October 2023
Wells Fargo Economics & Financial Report / Oct 27, 2023
Treasury yields surged this week due to strong economic activity, impacting expectations for longer-term rates. New home sales led to a rise in single-family permits, but spiking mortgage rates are testing builder affordability strategies.
This Week's State Of The Economy - What Is Ahead? - 23 April 2021
Wells Fargo Economics & Financial Report / Apr 26, 2021
This week\'s lighter economic calendar allowed forecasters more time to assess the implications from the prior week\'s blowout retail sales report.
This Week's State Of The Economy - What Is Ahead? - 25 June 2021
Wells Fargo Economics & Financial Report / Jun 26, 2021
Supply chain bottlenecks continue to cause pain-in-the-necks. In spite of all the difficulties, the Economic whizzes in the WF Economics team have upgraded their forecast for full-year 2021 U.S.
This Week's State Of The Economy - What Is Ahead? - 11 June 2021
Wells Fargo Economics & Financial Report / Jun 26, 2021
Okay, so I’ve gotten about half a dozen calls since Wednesday asking if I saw the May CPI numbers that came out this week.
May 2020 Economy at a Glance
Wells Fargo Economics & Financial Report / May 19, 2020
The U.S. is in a severe recession caused by the sudden shutdown due to the COVID-19 pandemic. Since the lock down began, the nation has lost 21.4 million jobs.
