Weekly Market Update: Helping you navigate the market

Fed Tightens
The US Fed tightened monetary policy by a massive amount this week at its meeting on Wednesday, and other global central banks also have been taking aggressive steps to fight inflation. As a result, mortgage rates reached their highest levels since 2008.

As expected, the Fed raised the federal funds rate by 75 basis points, the largest increase since 1994, and indicated that many more rate hikes will take place in coming months. Chair Powell said that an increase of either 50 or 75 basis points was likely at the next meeting in July. The average of the “dot plot” forecasts from officials is that the federal funds rate will end the year at 3.40% and will reach a peak of 3.80% in 2023, which is significantly higher than the prior projections in March. Officials also lowered their forecasts for GDP growth in 2022 to 1.7% from 2.8%. One key takeaway was that the Fed intends to remain tough on inflation even if it slows economic growth.

Since consumer spending accounts for over two-thirds of US economic activity, it is an important indicator of the health of the economy. Retail sales were expected to post a slight gain in May, but instead fell 0.3% from April. The shortfall was primarily due to a sharp decline in vehicle sales, as well as reduced spending on furniture and electronics. Despite the negative reading in May, though, consumer spending was still a strong 8% higher than a year ago.

Home buyers desperately need more inventory in many regions, but the most recent data was disappointing. In May, housing starts fell 14% from April, far below the consensus forecast, to the lowest level since April 2020. Building permits, a leading indicator of future activity, also fell short of expectations with a 7% decline from April. Once again, builders reported higher prices and shortages for land, materials, and skilled labor as issues holding back a faster pace of construction.

Week ahead

Looking ahead, investors will continue to closely follow news on Ukraine and Covid case counts in China. They will also look for additional Fed guidance on the pace of future rate hikes and bond portfolio reduction. Beyond that, it will be a very light week for economic reports. Existing Home Sales will be released on Tuesday and New Home Sales on Friday. Mortgage markets will be closed on Monday in observance of Juneteenth.

Tue

6/21

Existing Home Sales

Thu

6/23

Jobless Claims

Fri

6/24

New Home Sales

Fri

6/24

Consumer Sentiment



Mortgage Rates

rose

0.15%

Dow

fell

1,500

NASDAQ

fell

600

We would like to thank our partner, MBSQuoteline for their insightful information.

What’s the real estate market like in Chicago right now? Are home prices rising or falling? Is it a good time to buy in Chicago? Is it a good time to sell?

These are the questions we get all the time. Unfortunately, by the time you read about the latest Case-Schiller report in the news, the market may have changed. But, good news: we have access to up-to-the-minute housing market data, along with boots-on-the-ground intel from working with active buyers and sellers in Chicago and the suburbs. Let’s get into it, shall we?
Chicago Real Estate Market By Area.

Hold up: you’re a smart Chicagoan, so you know the real estate markets in West Loop or Bronzeville aren’t the same as they are in Downers Grove or Evanston. So what does the 2022 real estate market hold for your neighborhood? Good news: We hand-crafts hyper-local market reports for every nook and cranny of Chicago and its surrounding suburbs. To get localized stats, forecasts, and the best advice for buyers and sellers in your neighborhood, fill out the form below.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Post a Comment