The Mortgage Economic Review is a Concise Monthly Summary of Key Economic Indicators, Data, and Events pertinent to Mortgage, Housing, and Finance Professionals.

 

AT A GLANCE – Key Economic Events and Data released during June 2025

• Interest Rates: The 10-year Treasury yield fell 4.24% (Jun 30) from 4.41% (May 30).
• Housing: Existing Home Sales rose 0.8% (-0.7% YoY), New Home Sales fell 13.7% (-6.3% YoY), and Home Prices are up 3.0% to 3.5% YoY.
• Labor: The US Economy created 139,000 New Jobs during May. The Unemployment Rate held steady at 4.2%. Wages are growing at 3.9% YoY.
• Inflation: CPI rose 0.1% in May (+2.4 YoY), and PCE rose 0.1% (+2.2% YoY).
• The Economy: US GDP contracted at a 0.5% annualized rate in 1Q2025 (+ 2.0% YoY).
• Consumers: Retail Sales fell 0.9% in May (+3.3% YoY), and Consumer Confidence fell 5.5% in June (-4.9% YoY).
• Stock Markets rose in June: Dow +4.3%, S&P +5.0%, Nasdaq +6.6%.
• Oil Prices rose to $65/Barrel (June 30) from $61/Barrel (May 30).

 

Interest Rates and Fed Watch

The Fed left Interest Rates unchanged after the FOMC Meeting  on June 18th. The Fed Funds Rate remains at 4.25% – 4.50% where it has been for the last 6 months. Fed Chairman Jerome Powell addressed the Financial Services Committee on June 24th. He said the Fed is ready to cut Interest Rates if Inflation continues to trend lower. However, he expects Inflation to rise this summer due to the impact of Tariffs. His recent testimony reiterates the Fed’s previous statements over the last 6 months – they are to waiting for Inflation to return to their 2.0% target before additional rate cuts. Traders are still expecting 2 rate cuts this year, most likely in September and December. The next FOMC meeting is July 29th and 30th. Fed Watchers don’t expect an Interest Rate cut in July.

• 10-Year T-Note Yield fell to 4.24% (Jun 30 ) from 4.41% (May 30).
• 30-Year T-Bond Yield fell to 4.78% (Jun 30) from 4.92% (May 30).
• 30-Year Mortgage fell to 6.77% (Jun 26) from 6.89% (May 29).
• 15-Year Mortgage fell to 5.89% (Jun 26) from 6.03% (May 29).

 

Housing Market Data Released during June 2025

Home Prices are slowly starting to drop. Prices are still up over the last 12 months. However, month over month Home Prices are starting to show small declines. In some areas of the country, it’s starting to shift to a Buyers Market. Several factors are contributing to the shift, including more Homes listed for sale, more New Homes being completed, and high Mortgage Rates.  Regardless of the cause, recent Data indicates the Housing Market is decelerating. 

• Existing Home Sales (closed deals in May) rose 0.8% to an annual rate of 4,030,000 homes (3,670,000 SFR + 360,000 Condos), down 0.7% in the last 12 months. The median Single Family Home price is $427,800, up 1.3% YoY. The Median Condo price is $371,300, up 0.7% YoY. Homes were on the market for an average of 27 days. Currently, 1,540,000 homes are for sale, up 20.3% YoY.
• New Home Sales (signed contracts in May) fell 13.7% to a seasonally adjusted annual rate of 623,000 Homes, down 6.3% YoY. (683,000 New Homes were sold in 2024 and 668,000 in 2023). The median New Home price is $426,600 (Peak $496,800 Oct 2022). The average price is $522,200 (Peak $568,700 Dec 2022). There are approximately 507,000 New Homes for sale, up 1.4% YoY (Low of 281,000 Oct 2020).
• Pending Home Sales Index (signed contracts in May) rose 1.8% to 72.1 from 71.3, down 1.1% YoY.
• Building Permits (issued in May) fell 2.0% to a seasonally adjusted annual rate of 1,393,000 units – down 1.0% YoY. Single-Family Permits fell 2.7% to an annual pace of 898,000 homes, down 6.4% YoY.
• Housing Starts (excavation began in May) fell 9.8% to a seasonally adjusted annual rate of 1,256,000, down 4.6% YoY. Single-Family Starts rose 0.4% to 924,000 units, down 7.3% YoY.
• Housing Completions (completed in May) rose 5.4% to a seasonally adjusted annual rate of 1,526,000 units – down 2.2% YoY. Single-Family Completions rose 8.1% to an annual adjusted rate of 1,027,000 homes – up 0.1% YoY.
• S&P/Case-Shiller 20 City Home Price Index fell 0.3% in April, up 3.4% YoY.
• FHFA Home Price Index fell 0.4% in April, up 3.0% YoY.
• NAHB Index fell 5.9% to 32 from 34 the prior month, down 25.6% YoY.

 

Labor Market Economic Data Released during June 2025

According to the Bureau of Labor Statistics (BLS), the Economy added 139,000 New Jobs in May. That was a healthy increased, but March and April data was revised down by 95,000, so we are only up 44,000. Of that 139,000, Health Care added 62,000, Hospitality added 48,000, and Social Assistance add 16,000.  Unfortunately, according to that data, not  a lot of high paying jobs were created. The Federal Government continued to shed workers, loosing 22,000 jobs in May and 59,000 since January. Expect Federal Jobs to continue to decline.

• The Economy created 139,000 New Jobs during May.
• The Unemployment Rate was unchanged at 4.2% in May.
• The Labor Force Participation Rate fell 62.2% in May from 62.6% in April.
• The Average Hourly Wage rose 0.4% during May, up 3.9% YoY.
• Job Openings rose to 7,391,000 in April from 7,192,00 in March and 7,480,000 in February. In 2024, the annual average number of job openings was 7,800,000.

 

Inflation Economic Data Released during June 2025

A decrease in Energy costs has kept Inflation and the CPI down over the past 12 months. However, the cost of just about everything else continues to rise. Energy Prices are down 3.5% YoY and Gasoline Prices are down 12.0% YoY. In the last 12 months, Shelter Cost (the biggest single CPI component) is up 3.9%, Food is up 2.9%, Used Cars up 3.0%, Medical Care up 3.0%, Transportation up 2.8%. As many Economists have cautioned the last 2 years: Inflation continues to be stubborn.

• CPI rose 0.1%, up 2.4% YoY       |  Core CPI rose 0.1%, up 2.8% YoY
• PPI rose 0.1%, up 2.6% YoY       |  Core PPI rose 0.1%, up 2.7% YoY
• PCE rose 0.1%, up 2.3% YoY      |  Core PCE rose 0.2%, up 2.7% YoY

 

GDP Economic Data Released during June 2025

The 3rd and final estimate of 1st Quarter 2025 GDP showed the US Economy contracted at a 0.5%  annualized rate, up 2.0% YoY.  This was significantly lower than the first two estimates of a 0.2% contraction. The main culprit for lower growth was significant reduction of Consumer Spending. The volatility of Imports and Exports continue to be a drag on the GDP calculation. Despite the recent negative data, the US Economy continues to plug along.

 

Consumer Economic Data Released during June 2025

There was a lot of red ink in recent Consumer Data. Consumers have moderated their spending as persistent Inflation and the uncertainty of Tariffs weighs on their psyche. Retail Sales plunged 0.9% in May. That is a steep decline. Sales at Restaurants and Bars have been fairly resilient over the past few years as Consumers continued to dine out. However, last month spending at Restaurants and Bars unexpectedly dropped 0.9%. Does that indicate that Consumers are tightening their belts? As always, don’t put too much credence in a single data point but look at the overall trend. We’ll wait and see if the negative Consumer Data continues next month.

• Retail Sales fell 0.9% during May, up 3.3% in the last 12 months.
• Consumer Confidence Index fell 5.5% to 93 from 98.4 in May, down 4.9% YoY.
• Personal Income fell 0.4% in May, up 4.5% YoY.
• Personal Spending fell 0.1% in May, up 4.5% YoY.
• Personal Savings Rate fell 8.2% in May to 4.5% from 4.9% in April and 4.3% in March.

 

Energy, International, and Things You May Have Missed

• West Texas Intermediate Crude rose to $65/Barrell (Jun 30) from $61/Barrel (May 30).
• North Sea Brent Crude rose to $68/Barrel (Jun 30) from $64/Barrel (May 30).
• Gasoline (Wholesale Futures) rose to $2.09/Gal (Jun 30) from $2.03/Gal (May 30).
• Natural Gas rose to $3.46/MMbtu (Jun 30) from $3.45/MMbtu (May 30).
• The European Central Bank (ECB) cut Interest Rates to 2.0% citing a slowdown in Economic Growth and the effects of US Tariffs.
• Israel and Iran engaged in a 12 day War before agreeing to a ceasefire after the US bombed Iranian nuclear facilities.

 

The Mortgage Economic Review is a concise summary of Key Economic Data that influences the Mortgage and Housing Markets. It’s a quick read that keeps busy Professionals updated on important Economic Information. Feel free to share this with colleagues in the Mortgage, Housing, Finance, and Banking business. To have the Mortgage Economic Review emailed to you each month, click here.

 

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This Economic Review is for informational and educational purposes only and should not be construed as investment, legal, financial, or mortgage advice. The information is gathered from sources believed to be credible and may be opinion-based and editorial in nature. Mortgage Elements Inc does not guarantee or warrant its accuracy or completeness, and there is no guarantee it is without errors. This newsletter is primarily intended for use Housing and Finance Professionals but it can be useful for anyone interested in Economics. This newsletter is not an advertisement to extend credit or solicit mortgage originations. © Copyright 2025 Mark Paoletti, Mortgage Elements Inc, All Rights Reserved.