Stocks are higher this morning as earnings continue to come in. Bonds and MBS are up.
Inflation at the consumer level rose 0.1% MOM and 3.4% YOY according to the Bureau of Labor Statistics. Ex-food and energy, the index rose 0.2% MOM and 2.5% YOY. These numbers were in line with expectations. Shelter rose 0.1% in July and accounted for about 2/3 of the increase in CPI. Shelter inflation was 3.2% on a YOY basis.
Energy was the big driver of the YOY increase in headline inflation, with gasoline prices up 25% YOY. Food was up 0.1% MOM and 3.0% YOY.
Existing home sales fell 1.7% last month to a seasonally adjusted annual rate of 4.06 million units. Sales were up 0.7% YOY. “Home sales have been remarkably stable, even amid the rising mortgage rate environment of the past few months,” said NAR Chief Economist Lawrence Yun. “Year-to-date sales are up 2.4% and there’s no doubt that the housing market would be thriving if average mortgage rates were to return near 6%.”
“Though the national data shows stabilization, there are notable local market variations,” Yun said. “In smaller cities, and particularly in the Midwest, an annual household income of $60,000 would be sufficient to buy a median-priced home.”
The median home price rose 2% to $434,100, while inventory fell to a 4.5 month supply.
Mortgage applications increased 3.6% last week as purchases rose 3% and refis rose 5%. “After five consecutive weeks of increases, mortgage rates declined slightly last week as oil prices dipped briefly on the hopes of a sustained resolution to the war in Iran. The 30-year fixed rate decreased four basis points but remained close to its highest level in a year at 6.77% ,” said Joel Kan, CMB, MBA’s Vice President and Deputy Chief Economist. “The reprieve in rates supported an increase in both purchase and refinance applications over the week, although the pace of applications has fallen below last year’s pace in recent weeks. As refinance incentives have dwindled with rates at current levels, the average loan size for refinance applications was down to its lowest level since July 2025.”
