Latest / Markets with Megan: A Quick Financial Markets Update / Is the Housing Market Thawing Finally? | S2 E059 | 07-24-25

Transcript

Is the Housing Market Thawing Finally? | S2 E059 | 07-24-25 · Markets with Megan: A Quick Financial Markets Update

• 0:00
  Megan Horneman: Let's take a step back and really dig into that housing data that we got this week, because it may not be as bad as those headline numbers show.
• 0:08
  Megan Horneman: It's Markets with Megan.
• 0:09
  Megan Horneman: This is Thursday, july the 24th.
• 0:12
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• 0:15
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• 0:16
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• 0:18
  Megan Horneman: But, as we usually do, we're here today to break apart the economic data and what does it mean for the future of the economy?
• 0:25
  Megan Horneman: Over the past couple of days, we've received quite a bit of economic data on the housing market for the month of June, and what we saw is that, whether you look at sales of existing homes or sales of new homes, both of these miss the expectation for the month.
• 0:41
  Megan Horneman: We're all not surprised by this.
• 0:43
  Megan Horneman: Housing has continued to be in recession for several years now, given the high interest rate environment.
• 0:48
  Megan Horneman: But we also saw the final reading on building permits, which tend to be a leading indicator for the future of the housing market.
• 0:55
  Megan Horneman: They actually declined as well.
• 0:57
  Megan Horneman: Now why am I taking a glass half full on this?
• 1:00
  Megan Horneman: Because let's look within the underlying fundamentals of housing, and first let's look at the existing home sales.
• 1:07
  Megan Horneman: We saw the month's supply.
• 1:09
  Megan Horneman: That's increased now to the highest level since June of 2016.
• 1:14
  Megan Horneman: That's good, because for so long, we didn't have enough housing houses for sale and this was causing prices to rise at a level that was filtering into what the Fed looks at in the inflation data.
• 1:28
  Megan Horneman: What we saw was that prices and this is where we get to inflation prices are growing on an annual basis only 2% now, so those price gains have started to slow down.
• 1:39
  Megan Horneman: We saw at the end of 2024 that prices were rising almost 6% on a year-over-year basis, so this is a big deceleration in the increase in housing prices.
• 1:50
  Megan Horneman: That could help.
• 1:51
  Megan Horneman: This could be the signs of maybe some thawing here in the housing market.
• 1:56
  Megan Horneman: When you look at new home sales as well, the headline number was disappointing, but look at the month's supply.
• 2:01
  Megan Horneman: It's now at the highest level we've seen since the fourth quarter of 2022.
• 2:05
  Megan Horneman: And prices saw their biggest month-over-month drop in seven months.
• 2:10
  Megan Horneman: You're now looking at an existing home sale.
• 2:12
  Megan Horneman: That's about a $435,000 for a median price.
• 2:16
  Megan Horneman: A new home is actually $402,000.
• 2:20
  Megan Horneman: Now what does this all mean?
• 2:22
  Megan Horneman: Let's look at the mortgage rates.
• 2:23
  Megan Horneman: Really, the mortgage rates over the past couple months have been stuck.
• 2:29
  Megan Horneman: You're looking about 6.8% 6.9% for just that median average rate of a 30-year fixed mortgage rate.
• 2:36
  Megan Horneman: Let's remember that's a fixed rate, the average rate, though that is still significantly higher than what we saw in the five years leading up to the pandemic, which is about 5.5 half percent Again, not surprising.
• 2:47
  Megan Horneman: It's dictated by interest rates, so mortgage rates are still high.
• 2:51
  Megan Horneman: We understand that that still is a factor of the Fed.
• 2:54
  Megan Horneman: But the supply may be showing signs of easing.
• 2:58
  Megan Horneman: That's good news for the rise in housing prices, because that leads into inflation and it will be something the Fed's looking at.
• 3:05
  Megan Horneman: That's all we have today.
• 3:07
  Megan Horneman: We'll be back tomorrow.
• 3:08
  Megan Horneman: We'll get that first reading on durable goods orders.
• 3:10
  Megan Horneman: That's important because it feeds right into the GDP numbers that we get here for the month of the second quarter, so for the month of June.
• 3:18
  Megan Horneman: If you want a further history of our podcast, you can go to marketswithmeganfm.
• 3:22
  Megan Horneman: Thank you so much.