New Home Sales – Up Slightly, But Watch the Mix
New Home Sales, which track signed contracts on new builds, rose 0.6% in June to a 627,000-unit annualized pace.
At first glance, the median home price appears to have dropped sharply—down nearly 5% to $401,800 from $422,700 last month. That headline will likely make the rounds in the media, but it’s not telling the full story.
The median price reflects the middle of all homes sold—not appreciation or depreciation. In June, 5,000 fewer homes were sold above $500,000, and 5,000 more were sold between $300,000 and $399,000. That shift in the mix of sales pulled the median price lower, but doesn’t signal a true decline in home values.
Inventory Update
There were 511,000 new homes for sale at the end of June—the highest since 2007. But supply isn’t quite what it seems:
•119,000 are completed and move-in ready
•121,000 haven’t even been started
•271,000 are under construction
So, while headline supply looks high, actual available inventory remains limited—especially for buyers who want a home today.
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Durable Goods – Headline Drops, But Core Shipments Solid
Durable Goods Orders fell 9.3% in June, after a sharp 16.5% gain in May. The large swings are mostly due to aircraft orders, which are lumpy and skew the headline number.
Core Durable Goods Orders, which strip out transportation, declined 0.7%—a surprise miss vs. expectations for a 0.2% gain. Last month’s report was revised higher by 0.3%, but still not enough to offset this decline.
Core Shipments, the component that feeds directly into GDP calculations, rose 0.4%—twice the forecast. That strength could result in a slight boost to Q3 GDP estimates.
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GDP – Still Weak Overall
Q1 GDP was revised lower to -0.5%. The Atlanta Fed currently estimates Q2 GDP at 2.4%. Averaging both quarters, the economy is running just under 1% growth for the first half of 2025—well below trend.
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Looking Ahead – Big Data Week Coming
Next week brings several key reports:
•ADP Jobs Report (Wed): Forecast is for just 20,000 new jobs in July
•BLS Jobs Report (Fri): Expectations for 102,000 new jobs and unemployment rising to 4.2%
•PCE Inflation (Fri): Fed’s preferred gauge is expected to show tame monthly readings and no change year-over-year
All eyes will be on how the labor market and inflation data shape expectations heading into the July 30 Fed meeting.