Daily Update 8-5-26
“The elevator to success is out of order. You'll have to use the stairs... one step at a time.”—Joe Girard, American salesman, motivational speaker, and author
NATIONAL MARKET UPDATE
Homes sold one day faster than a year ago for the second time in four weeks, while active inventory posted its largest annual gain since April, giving buyers more choices without slowing market activity.
Mortgage affordability improved slightly in June as the median monthly payment for purchase applicants declined, offering modest relief even with mortgage rates remaining elevated.
Fitch reported homeowners continue to benefit from substantial equity and low-rate mortgages, helping keep overall mortgage performance stable despite a slower housing market.
FED HOLDS STEADY...Stocks moved higher last week after the Federal Reserve left interest rates unchanged for a fifth straight meeting. Investors were also encouraged by another strong week of corporate earnings, particularly from large technology companies.
Treasury yields climbed after the Fed signaled inflation remains its primary focus, while markets continued weighing the possibility of another rate increase later this year. Mortgage rates held near recent highs as bond markets adjusted to the Fed's outlook.
Economic growth remained positive as second-quarter GDP expanded at a 1.5% annual pace, while June inflation eased modestly. Consumer spending and employment continue supporting the broader economy.
The week ended with the Dow up 1.0%, to 52,485, the S&P 500 up 1.0%, to 7,490, and the Nasdaq up 1.6%, to 25,374.
Bond markets remained volatile following the Fed meeting, keeping mortgage rates elevated. Investors continue watching inflation and labor market data for clues on when policy could eventually shift.
Nearly 86% of S&P 500 companies reporting second-quarter earnings have exceeded analyst expectations, with earnings growth broadening beyond the technology sector.
Markets will watch this week's reports on the job market, consumer spending, and housing activity for clues about the economy's direction. Investors will also be looking for signs that inflation continues to ease, which could help keep mortgage rates from moving higher. With inventory continuing to improve, stable rates could encourage more buyers and sellers to move forward before the summer season winds down.
Forecasting Federal Reserve policy changes in coming months. Rates remained unchanged last week as policymakers emphasized they will continue monitoring inflation and economic data before making any policy changes. Note: In the lower chart, the 62.7% probability of change means there’s an 37.3% probability the rate will stay the same. Current rate is 3.50%-3.75%.
BUSINESS TIP
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