During its July policy meeting This Week in Real Estate, the Federal Reserve opted to maintain the Federal Funds Rate at its current level for the fifth consecutive time. Notably, for the first time in over 30 years, two committee members dissented from the consensus, advocating for a rate cut. The next Federal Reserve meeting is scheduled for September. The latest employment data from the Bureau of Labor Statistics revealed weaker-than-anticipated job growth in July. The U.S. economy added 73,000 jobs, falling short of the projected 100,000. Additionally, job figures for May and June were revised downward by a combined 258,000. The unemployment rate edged up to 4.2%, and the three-month average for job creation now stands at just 35,000. These developments are likely to intensify scrutiny on Federal Reserve Chair Jerome Powell as policymakers assess the trajectory of monetary policy. In housing, pending home sales declined by 0.8% in June, following a 1.8% increase in May. The National Association of Realtors’ Pending Home Sales Index (PHSI) is now 2.8% below its level from one year ago, reflecting ongoing caution in market activity. Despite these headwinds, homeowner equity remains a bright spot. According to ATTOM’s Q2 2025 mortgage equity report, 47.4% of mortgaged residential properties are considered equity-rich – meaning the combined loan balance is no more than half of the property’s estimated market value. This marks an increase from 46.2% in Q1 2025 and reverses a trend of three consecutive quarterly declines. Below are key events from the final week of July and beginning of August impacting our business:
FED REMAINS ON PAUSE AGAIN. At the conclusion of its July meeting, the Federal Reserve’s monetary policy committee once again held the federal funds rate constant at a top rate of 4.5%. However, two members of the committee dissented from the decision (Fed Board Governors Waller and Bowman), the largest number of dissenting votes since 1993. NAHB is forecasting two rate reductions before the end of the year, including one at the next Fed meeting in September. President Trump has made it clear that he believes the central bank needs to cut again. All that said, except for the presence of dissenting votes in today’s decision, the Fed’s statement did not appear to be more dovish than those of prior months, which is indicative that the Fed remains data dependent. The continued decline for service sector inflation points to moderating overall inflation, which when combined with softening job openings data and growing specifics about trade policy, provides justification for a resumption of continued monetary policy easing. Read the full story here.
PENDING HOME SALES DROP IN JUNE AS BUYERS STRUGGLE WITH AFFORDABILITY. Pending sales of existing homes dropped in June, dimming hopes for a summer surge in the housing market as affordability concerns continue to sideline buyers. The Pending Home Sales Index, based on signed contracts for existing homes, dropped 0.8% last month from May, and declined 2.8% year-over-year, the National Association of Realtors® reported on Wednesday. Although the supply of homes for sale is rising, with the national count of active listings up 29% in June from a year ago, buyers remain reluctant. Average 30-year mortgage rates eased slightly in June, dropping to 6.77% at the end of the month, from 6.89% at the end of May, according to Freddie Mac. The national median sales price for existing homes hit an all-time high of $435,300 in June, up 2% from a year ago, according to NAR. Read the full story here.
JULY JOBS DATA MISSES EXPECTATIONS, INCLUDES MAJOR REVISIONS FOR MAY AND JUNE. Data released Friday by the U.S. Bureau of Labor Statistics (BLS) shows that total nonfarm payroll employment rose by 73,000 jobs in July from the month prior, while unemployment ticked up slightly to 4.2%. Economists had expected 100,000 jobs to be created and the BLS report negative revisions to May and June numbers were larger than normal. The change in total nonfarm payroll employment for May was revised down by 125,000, from 144,000 to 19,000, and the change for June was revised down by 133,000, from 147,000 to 14,000. With these revisions, employment in May and June combined is 258,000 lower than previously reported. “The outlook for inflation and employment remains fragile, and MBA’s forecast is for the unemployment rate to increase to over 4.5% by the end of the year, peaking at around 4.8% in early 2026, as the economy continues to slow,” Kan said. “We expect that this labor marketing softening will prompt the Fed to cut rates twice this year and once in 2026.” Read the full story here.
HOME EQUITY REBOUNDS IN STRONG SECOND QUARTER. ATTOM released its second quarter 2025 U.S. Home Equity and Underwater Report Thursday, which shows that 47.4 percent of mortgaged residential properties in the country were equity-rich, meaning the combined estimated amount of loan balances secured by those properties was no more than half of their estimated market value. That was up from 46.2 percent in the first quarter of this year, reversing a recent trend where the share of equity-rich homes had declined for three straight quarters after peaking at 49.2 percent in the second quarter of 2024. “With home prices at record highs you’d expect to see owners enjoying more equity in their homes so it’s good to see equity-rich rates rebound after a few slower quarters,” said Rob Barber, CEO of ATTOM. Read the full story here.
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