The latest Consumer Price Index (CPI) report has reinforced expectations that a rate cut in July remains unlikely. According to the Bureau of Labor Statistics This Week in Real Estate, inflation accelerated to a four-month high in June, with the CPI rising to 2.7% year-over-year, up from 2.4% in May. On a monthly basis, the index increased by 0.3%, marking the largest gain since January. In the new construction sector, the National Association of Home Builders (NAHB) reported a modest improvement in builder sentiment for July, as reflected in their Housing Market Index (HMI). However, overall confidence remains tempered by ongoing affordability challenges, elevated mortgage rates, and broader economic uncertainty – factors that continue to constrain single-family home construction. Data from the U.S. Census Bureau for June showed a slight increase in building permits and housing starts, primarily driven by multifamily developments. In contrast, single-family activity remains subdued, with starts falling to an 11-month low and permits declining 8.4% year-over-year. Meanwhile, the Q2 2025 Fannie Mae Home Price Index indicates that home price appreciation continues, albeit at a slower pace. Single-family home prices rose 4.1% year-over-year in Q2 2025, down from 5.0% in the previous quarter, signaling a gradual deceleration in price growth. Below are key events from the third week of July impacting our business:
SINGLE-FAMILY STARTS WEAKEN IN JUNE AS AFFORDABILITY CHALLENGES PERSIST. Single-family housing starts declined in June to the lowest rate since July 2024 as elevated interest rates, rising inventories and ongoing supply-side issues continue to act as headwinds for the housing sector. Due to a solid increase in multifamily production, overall housing starts increased 4.6% in June to a seasonally adjusted annual rate of 1.32 million units, according to a report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. Within this overall number, single-family starts decreased 4.6% to an 883,000 seasonally adjusted annual rate and are down 10% compared to June 2024. The multifamily sector, which includes apartment buildings and condos, increased 30% to an annualized 438,000 pace. Overall permits increased 0.2% to a 1.40-million-unit annualized rate in June. Single-family permits decreased 3.7% to an 866,000-unit rate and are down 8.4% compared to June 2024. Multifamily permits increased 7.3% to a 531,000 pace. The declines for single-family home building have caused the number of single-family homes under construction to level off. There are currently 622,000 single-family homes under construction, which is 6% lower than a year ago. The number of apartments under construction in June, 739,000, is 18.8% lower than a year ago. Read the full story here.
INFLATION PICKS UP AGAIN IN JUNE, RISING AT 2.7% ANNUAL RATE. The consumer price index, a broad-based measure of goods and services costs, increased 0.3% on the month, putting the 12-month inflation rate at 2.7%, the Bureau of Labor Statistics reported Tuesday. The numbers were right in line with the Dow Jones consensus, though the annual rate is the highest since February and still above the Federal Reserve’s 2% target. Excluding volatile food and energy prices, core inflation picked up 0.2% on the month and an annual rate of 2.9%. Shelter prices increased just 0.2% for the month, but the BLS said the category was still the largest contributor to the overall CPI gain. Markets largely took the inflation report in stride. Amid the previously muted inflation ratings, Trump has been urging the Federal Reserve to lower interest rates, which it has not done since December. Central bankers, led by Chair Jerome Powell, have refused to budge. They insist that the U.S. economy is in a strong enough position now that the Fed can afford to wait to see the impact tariffs will have on inflation. Markets expect the Fed to stay on hold when it meets at the end of July and then cut by a quarter percentage point in September. Read the full story here.
HOME PRICE GROWTH MODERATES IN SECOND QUARTER. Single-family home prices increased 4.1 percent from Q2 2024 to Q2 2025, down from the previous quarter’s year-over-year growth pace of 5.0 percent, according to the latest reading of the Fannie Mae Home Price Index (FNM-HPI). The FNM-HPI is a national, repeat-transaction home price index measuring the average, quarterly price change for all single-family properties in the United States, excluding condos. This continues the general moderation in home price growth observed since the start of 2024. On a quarterly basis, home prices rose 0.3 percent and 2.0 percent in Q2 2025 on a seasonally adjusted and non-seasonally adjusted basis, respectively. Read the full story here.
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