The Daily Tearsheet

Vital Statistics:

Stocks are flat despite a hotter-than-expected PPI print. Bonds and MBS are down.

Inflation at the wholesale level rose 0.9% MOM in July, which was much higher than the Street estimate of 0.2%. On a YOY basis, prices rose 3.3%. If you exclude food and energy, the numbers were even worse: a 0.9% MOM jump and a 3.9% YOY increase. The core rate, which excludes food, energy and trade services rose 0.6% MOM and 2.8% YOY.

June’s numbers were unusually low, showing zero monthly inflation, so perhaps the July numbers were exhibiting some “catch up.” Trade services were the big driver, which represents retail and wholesaler margins. Machinery and equipment accounted for 30% of the jump. On the goods side, about of a quarter of the increase came from vegetables.

While some of the increase can be traced to tariffs (the equipment and machinery probably is), it appears a lot of it (hotels, portfolio management, investment advice, trucking) are not. Note this reading is the first with a new methodology which eliminated some 350 categories it used to track. As a result, the numbers are not really comparable to previous readings. So you might want to put an asterisk next to this.

The initial reaction in the bond market is negative, with the 10 year down about 3 basis points since the report came out.

Treasury Secretary Scott Bessent made some comments regarding Fed policy and possible replacements for Jerome Powell when he steps down. When asked about Powell’s replacement, Bessent laid out a laundry list of names including the two Kevins (Warsh and Hassett), along with Michelle Bowman, Laurie Logan and a few other names.

Bessent’s comments on monetary policy urged rate cuts: “If we’d seen those numbers in May, in June, I suspect we could have had rate cuts in June and July. So that tells me that there’s a very good chance of a 50 basis-point rate cut,” in September, Bessent said in an interview on Bloomberg television.

“Rates are too constrictive…We should probably be 150 to 175 basis points lower,” Bessent said, adding to the Trump administration’s penchant for public criticism and detailed policy advice for the independent central bank. While Trump would like to see rates around 1%, Bessent was arguing for a 2 handle on the Fed Funds rate, which is below neutrality (r*).

Next week is the Jackson Hole Summit, and markets will be anticipating a signal that rates are coming down in September. The Fed Funds futures see a cut as a certainty and are pricing in a small chance of a 50 basis point cut. The December futures are starting to price in a small chance of 100 basis points in cuts this year.

The Trump Administration teased the idea of IPO-ing Fannie Mae and Freddie Mac “I am working on TAKING THESE AMAZING COMPANIES PUBLIC, but I want to be clear, the U.S. Government will keep its implicit GUARANTEES, and I will stay strong in my position on overseeing them as President,” Trump added.

Generally speaking the term “taking a company public” means an IPO (initial public offering). If you issue stock for a company that is already trading, it is called a secondary offering.

Fannie Mae trades already on the OTC Bulletin Board Exchange (aka the pink sheets). Freddie Mac does as well. Fannie Mae’s ticker is FNMA and Freddie’s is FMCC. These stocks have been on a tear since Trump got elected, and trade nearly 10 million shares a day. The companies have a market cap of about $12 billion.

So if Trump wants to sell Fannie and Freddie stock to the public, why would he characterize it as “taking these companies public” and not as a secondary offering? That language implies that a new stock is coming, not a sale of additional shares of FNMA or FMCC. So if that is the case, what happens to the older stock that is currently trading? It is helpful to remember how we got here.

During the Great Recession and Financial Crisis, the government took over 80% of Fannie and Freddie and placed them in conservatorship. Why did they take over 80% and not 100%? Because then the government would have had to consolidate all of Fannie and Freddie’s outstanding MBS into the national debt. This would have added trillions of liabilities to the US balance sheet. Instead, it is treated as a contingent liability – a form of off-balance sheet financing. The Fannie and Freddie stock currently trading exists solely as an accounting convenience for the government. The government is entitled to all of Fan and Fred’s profits, and FMCC / FNMA shareholders have no claim to it nor do they have voting rights. This isn’t a normal stock, like owning shares of Apple.

The Obama Administration was adamant that if the GSEs were ever released from conservatorship that the extant shareholders should get nothing. The company was insolvent when it was taken over and under a normal bankruptcy / reorganization the shareholders would have been wiped out. Granted Trump isn’t Obama, but the logic hasn’t changed and the use of the term “taking the companies public” should be taken as an ominous sign.

So if there is an IPO, what would become of the old stock? It probably won’t be fungible with the new stock and won’t be entitled to dividends, a vote, or have a claim on the profits / assets of the company. If the government declares the old stock worthless, it will become a litigation lottery ticket as activist hedge funds sue the government to force them to give the shareholders something. But anyone getting excited about Fan and Fred going public should keep in the back of their minds that the current FNMA and FMCC stock might not participate in the emancipated entity and could be worthless even if Fan and Fred thrive.

Nobody knows what Trump is thinking here, but if this was happening under Biden or Obama the stock would be worthless.

Vital Statistics:

Stocks are higher as markets anticipate rate cuts. Bonds and MBS are up.

Mortgage applications rose 11% last week as purchases increased 1% and refis rose 23%. On an YOY basis, refis are up 9% and purchases are up 17%. Things are getting better in the mortgage business.

“The 30-year fixed mortgage rate declined to 6.67% last week, which spurred the strongest week for refinance activity since April. Borrowers responded favorably, as refinance applications increased 23%, driven mostly by conventional and VA applications,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Refinances accounted for 46.5% of applications and as seen in other recent refinance bursts, the average loan size grew significantly to $366,400. Borrowers with larger loan sizes continue to be more sensitive to rate movements.”

Added Kan, “Given the relative attractiveness of ARM rates compared to fixed rate loans, ARM applications increased 25% to their highest level since 2022 and the ARM share of all applications was almost 10%. However, lower rates were not enough to entice more homebuyers back into the market, as purchase applications were only up around 1% over the week, although still stronger
than last year’s pace.”

Mortgage credit availability increased in July, according to the MBA. “Credit availability edged slightly higher in July, driven by increased availability of ARM loans,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “This development was consistent with a steeper yield curve and the jumbo-conforming spread back in negative territory. The average jumbo rate was around 8 basis points lower than the average conforming rate in July. Additionally, data from a separate survey showed that ARMs loan applications have picked up in recent months, although activity is still muted compared to historical averages. Credit availability of conforming loans declined slightly over the month, mostly due to a pullback in renovation loans.” 

Yesterday’s CPI report showed that tariff-driven inflation is evident, but its effect is small. Shelter was the biggest component of the increase, but its effect is waning. Below is a chart of the YOY increase in the shelter component of the CPI.

In January of 2020, CPI shelter was 3.35% and today it is 3.69%. It peaked at 8.17% in 2022. We are very close to normal pre-pandemic levels in the index. Note that with asking rents falling and home price appreciation waning, shelter inflation could begin to drag CPI lower. Note that some of the other big contributors to the CPI increase have nothing to do with tariffs: things like airline travel, used cars, dental services etc.

The September Fed Funds futures are pricing in a 100% chance for a rate cut, and the December futures are circling around 3 this year, which probably means September, October, and December. Whatever feared spike in inflation has yet to arrive, and the Fed’s stance of maintaining tight policy in the context of a deteriorating labor market is becoming untenable.

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Vital Statistics:

Stocks are flat this morning after the CPI came in more or less in line with expectations. Bonds and MBS are up small.

Inflation at the consumer level rose 0.2% MOM and 2.7% YOY, according to the BLS. Shelter rose 0.2% and was the main driver of the increase. The core rate, which excludes food and energy rose 0.3% MOM and 3.1% YOY. Medical care, airline fares, recreation, household furnishings and operations, and used cars and trucks drove the increase. While furniture could be related to tariffs, the rest of the items are not.

The Fed Funds futures moved little on the announcement, with the September futures still seeing a 80% chance for a 25 basis point cut. The Fed’s stance of waiting to see if tariffs cause a spike in inflation is becoming more and more untenable, especially with the job market data becoming much soggier.

The CPI comes from the Bureau of Labor Statistics, which lost its head after the huge downward revisions in job growth. The new nominee (E.J. Antoni) comes from the Heritage Foundation and has been critical of BLS’s methodologies. “There are better ways to collect, process, and disseminate data—that is the task for the next BLS commissioner, and only consistent delivery of accurate data in a timely manner will rebuild the trust that has been lost over the last several years,” Antoni recently posted on X. 

IMO the BLS data doesn’t take into account the new gig economy very well, and it really should dispense with the fiction that someone under the age of 65 who has been unemployed for 7 months is no longer in the labor force. Job searches take time – often more than 6 months – and that person is most definitely unemployed.

Small business optimism continues to rebound, with the index rising just over the 52 year historical average. We are seeing signs of labor softness here as well, with a decrease in the number of owners who said they had jobs they couldn’t fill. Sales continue to be weak, with a net 9% reporting that sales were lower over the past 3 months.

Fewer companies are raising prices, although a net 24% did increase prices last month. That said, inflation registered third as the single most important problem behind labor quality and taxes.

Overall, the economy is still trending sideways and a bit southward. Interest rates remain unchanged and are higher than expected, although prospects for cuts in the Fed’s policy rate in the next few months are very good. The small business sector is waiting for the rollout of the One Big Beautiful Bill provisions and the final shape of the tariffs. Uncertainty remains high.

Overall consumer sentiment is low compared to historical norms, though sharply divided along partisan lines. Since October 2024, the University of Michigan’s sentiment data for Democrat-leaning consumers has fallen from 91.6 to 41.0 (Table 34). For Republicans, the Index rose from 50.2 to 93.1. Opinions about government policy are similarly bifurcated, with Democrat falling from 146 to 12 while the Republican Index rose from 24 to 146. Small business sentiment remains moderate, although it ticked higher this month. This is not conducive for investment spending needed to improve our productivity and produce new goods and services.

Uncertainty is high and rising, with tariffs, inflation, and international conflict such as in Gaza all sources of doubt. The Uncertainty Index rose 8 points to its fifth highest reading ever, clouding decisions about hiring, pricing, investment in plant and equipment. The tension between President Trump’s goals, Democratic opposition, and undecided court cases adds to uncertainty and the level of discomfort in the economy. The next six months will hopefully offer clarity and resolutions to most of the issues that trouble consumers and policy makers, giving businesses greater certainty, confidence, and ability to invest.

Vital Statistics:

Stocks are higher this morning on no real news. Bonds and MBS are up small.

The week ahead will be dominated by the Consumer Price Index on Tuesday and the Producer Price Index on Thursday. We will also get retail sales, consumer sentiment, and a slew of Fed speakers.

Nonfarm productivity rose 2.4% in the second quarter, which was much better than the Street estimate of a 1.9% increase. Productivity is a big deal since it allows for the economy to grow faster without triggering inflation. Unit Labor Costs rose 1.6%, which was also higher than expected.

First quarter productivity was revised downward by 0.3%.

The Trump Administration is imposing a 15% levy on AI chip sales to China, affecting AMD and Nvidia. This fee is in exchange for an export license to sell their newer chips to China. “We follow rules the U.S. government sets for our participation in worldwide markets,” Nvidia said in a statement Sunday. “While we haven’t shipped H20 to China for months, we hope export control rules will let America compete in China and worldwide.”

National security hawks have been reluctant to sell these chips to China for fear it will boost their military. The US Government generally gets veto power over sensitive national security sales and the Pentagon usually gets whatever policy it wants.

The Biden Administration also put export controls on Nvidia’s chip sales to China, so this isn’t completely unprecedented.

Donald Trump has nominated his Council of Economic Advisors head Stephen Miran to replace Adriana Kugler on the Board of Governors. He will serve out the remainder of her term, which expires in January. “By selecting Miran, Trump has made a stop-gap appointment and given himself until January to make the main call,” Marco Casiraghi, senior economist and strategist at Evercore ISI, said in a note. “This way Trump did not tie his hands, keeping his options open regarding the choice of the new Fed governor and especially the new Fed chair.”

Fed Governor Michelle Bowman said that the Fed should be cutting rates because the labor market is weakening and it looks like the inflationary impact of tariffs will be muted.

At last week’s FOMC meeting, I dissented from the Committee’s decision to hold the policy rate at its current level. Today I’d like to share some additional perspective about my views on the economy. So far this year, the FOMC has held the target range for the federal funds rate steady at 4-1/4 to 4-1/2 percent. Earlier this year, I believed our policy stance was appropriate, giving time to allow the Committee to monitor the progress of inflation toward our goal and to better understand the impacts of the Administration’s policies on the economy.

At the June FOMC meeting and in a speech shortly following that meeting, I began to lay out my reasoning to support the process of beginning to gradually lower the federal funds rate in July based on my assessment of signs of fragility in labor market conditions.² In my view, economic conditions appeared to be shifting, and as a result, we should reflect this shift in our policy decisions. Inflation has moved considerably closer to our target, after excluding temporary effects of tariffs, and the labor market has remained near full employment. As my dissent statement notes, with economic growth slowing this year and signs of a less dynamic labor market becoming clear, I see it as appropriate to begin gradually moving our moderately restrictive policy stance toward a neutral setting. 

On trade policy, foreign suppliers are absorbing some of the new tariffs, and importers are shifting to lower tariffed sources. Slack in the economy should also allow for only limited one-time price effects this year and very little, if any, “second-round” effects on inflation in the medium term. I also expect that less restrictive regulations, lower business taxes, and a more friendly business environment are likely to boost supply and offset any tariff-related effects on economic activity and prices over the medium term.

Vital Statistics:

Stocks are higher this morning despite the fact that new tariffs are kicking in. Bonds and MBS are down small.

The Bank of England cut rates this morning, which should help global yields going forward

Yesterday’s 10 year auction was a bit weak, with the bid-to-cover ratio coming in at 2.35. The average lately has been around 2.58, which means demand was lagging.

Home prices 3.1% on an annual basis according to the Clear Capital Home Data Index.  National home prices rose 1.7% on a quarterly basis and 3.1% annually. The Northeast and the Midwest continue to outperform, while the previously hot markets in Florida and the Sunbelt struggle. 

The biggest gainers were in the hip to be square category, with MSAs like Rochester NY, and Birmingham AL.

Asking rents were basically flat in June, according to Apartment List National Rent report. National rent prices fell 0.8% YOY to $1,402. This is about 2.8% below the August 2022 peak.

The vacancy rate for multifamily properties hit a record 7.1% for the series which goes back to 2017. Surprisingly, the Bay Area is seeing the biggest rent growth, while Sunbelt MSAs like Austin and Phoenix are falling as new supply hits the market.

“All of our key indicators are pointing toward ongoing sluggishness in the multifamily rental market – rent growth is slipping and the vacancy rate is at an all-time high. A return to tighter market conditions should still be on the horizon, but the outlook has been complicated by macroeconomic whiplash being caused by tariffs and other policies being pursued by the Trump administration. That uncertainty appears to have modestly dampened demand during this moving season. And although the supply wave is receding, the number of units that hit the market in the first half of this year was still above the long-run average. With construction expected to slow further in the second half of this year and into 2026, conditions are likely to shift.”

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Vital Statistics:

Stocks are higher this morning on no real news. Bonds and MBS are down small.

The services economy continued to expand in July, albeit at a slower rate according to the ISM Services Index. The Business Activity Index moved markedly lower although it is still in expansion territory. On the other side, employment continued to contract, while prices rose.

“July’s PMI^® level continues to reflect slow growth, and survey respondents indicated that seasonal and weather factors had negative impacts on business. The Employment Index’s continued contraction and faster expansion of the Prices Index are worrisome developments. The New Exports (a 3.2-percentage point decrease in July) and Imports (a 5.8-point drop) indexes, which both moved from expansion to contraction, provided signals that tariff tensions are impacting global trade. However, continued expansion in the Business Activity and New Orders indexes, together with a slight improvement in the Backlog of Orders Index, highlight the resilience of the U.S. services sector. Some respondents noted increased transportation congestion that supported the ‘slower’ Supplier Deliveries Index reading, another sign that activity levels are expanding. The most common topic among survey panelists remained tariff-related impacts, with a noticeable increase in commodities listed as up in price.”

Mortgage applications increased 3.1% last week as purchases increased 2% and refis rose 5%. “Mortgage rates moved lower last week, following declining Treasury yields as economic data releases signaled a weakening U.S. economy. As a result, the 30-year fixed rate decreased for the third straight week to 6.77%,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Borrowers sought to take advantage of these lower rates, as both purchase and refinance applications increased over the week. Purchase activity continued to lead 2024’s pace, as increasing for-sale inventory of homes has been supporting homebuying, but on the other hand recent weakness in the economic environment has deterred some prospective homebuyers.”

So far, the fear-mongering about tariffs hasn’t been proven right. Inflation has ticked up mildly, but nothing dramatic, the trade deficit has shrunk, and government revenues have increased. We have seen no supply shocks like we did during the pandemic. Employment has slowed, however so the effect hasn’t been completely benign.

Vital Statistics:

Stocks are higher this morning on no real news. Bonds and MBS are down small.

What a difference a day makes. The BLS revision caused the Fed Funds futures to completely re-assess the future path of rate. The September futures now see a 90% chance of a cut compared to 40% after the FOMC meeting. The December futures went from predicting one cut this year to three:

The unemployment rate has been held down by a declining labor force participation rate. When someone has been unemployed for six months, they no longer count as unemployed. The transition to the “NILF” or not in labor force category. If they were still counted as unemployed, the unemployment rate would be much higher, probably in the upper 4% range.

The Fed released its Senior Loan Officer Survey yesterday, which indicated that demand for loans is slowing and lenders are tightening standards slightly. In residential mortgages, banks left standards more or less unchanged, although they did tighten standards somewhat for home equity products. So far we haven’t seen major problems with commercial real estate for most banks.

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Mortgage rates have fallen to the lowest level in 10 months, which is giving buyers more purchasing power. “This dip in mortgage rates gives house hunters a window of opportunity to buy before summer ends,” said Daryl Fairweather, Redfin’s chief economist. “While housing costs are still fairly high, the recent decline in rates boosts purchasing power and improves overall homebuying conditions. Combined with the surplus of homes for sale on the market, serious buyers may want to jump in sooner rather than later.”

Vital Statistics:

Stocks are higher this morning on no real news. Bonds and MBS are up.

The week ahead is relatively data-light, with only the ISM report containing important data. We have some Fed-speak as well.

In response to the jobs report on Friday, President Trump fired the head of the Bureau of Labor Statistics, accusing her of “rigging” the data. He claims that the BLS overstated job growth in 2024 to help Joe Biden, and then revised everything downward once Trump won. “Head of the Bureau of of[sic] Labor Statistics did the same thing just before the Presidential Election, when she lifted the numbers for jobs to an all time high,” Trump said in a post to his Truth Social account Sunday afternoon. “I then won the Election, anyway, and she readjusted the numbers downward, calling it a mistake, of almost one million jobs.”

Erika McEntarfer, the head of the BLS isn’t known for being political, so there isn’t much evidence that she was playing politics with the data. That said, ever since the pandemic there have been major problems with BLS data. The response rate has fallen from 80% to the mid 60s, and the revisions have been pretty massive.

Would the Fed have cut rates last week knowing that job growth had stalled for the past 3 months? Maybe not. But, would Jerome Powell have said “The economy is not performing as though restrictive policy were holding it back inappropriately?” Probably not either. If anything, Trump’s actions should light a fire under the bureaucrats at BLS to fix the revision problems and the response rate.

Separately, Fed Governor Adriana Kugler announced her resignation on Friday. She was a Biden appointee to replace Lael Brainard who took a position in the Biden Administration. Trump said that he will only consider nominees who want to lower interest rates.

Consumer sentiment improved in July, according to the University of Michigan Consumer Sentiment Index. “Consumer sentiment improved for the second straight month, inching up a scant single index point from June. Current conditions rose about 5% to its highest reading since February 2025, while the expectations index fell slightly. A rise in sentiment among stock holders was partially offset by a decline among consumers who do not own stocks. Perceptions of this month’s economic developments were similar across the political spectrum; Republicans, Independents, and Democrats all saw some minor increases in sentiment this month. Although recent trends show sentiment moving in a favorable direction, sentiment remains broadly negative. Consumers are hardly optimistic about the trajectory of the economy, even as their worries have softened since April 2025.”

Inflation expectations eased from 5% to 4.5%, which is the lowest reading since February. Long-run inflationary expectations fell markedly from 4% to 3.4%.

The ISM Manufacturing Index fell again in July, decreasing 1 point to 48, which indicates the manufacturing industry is in contraction. Demand inputs improved modestly, however employment continues to contract. Here is how a machinery executive characterized the situation: “Currently, higher interest rates still depress the construction industry for new construction projects. Tariff policies are uncertain, which slows down (1) our investment in new projects, (2) component sourcing for new products, (3) blanket orders and (4) replenishment of large inventory quantities. Instead, we’re working to shift suppliers to lower political risk countries or develop domestic sources. We are impacted by the higher tariffs on costs of raw materials and components both sourced domestically and from overseas, and we expect expenses will be higher in the third and fourth quarters as we consume the inventory received with new and higher tariffs or update costs from domestic sources in the second quarter.”

Vital Statistics:

Stocks are lower this morning on a disappointing jobs report. Bonds and MBS are up.

The economy added 73,000 jobs in July, which was lower than expected. The unemployment rate ticked up 4.2%, while the labor force participation rate fell again. Healthcare and social assistance led the job growth, while manufacturing fell.

The internals of the jobs report are bad yet again. The jobs created were completely driven by statistical and seasonal adjustments. The number of people actually collecting paychecks fell from 163.37 million to 163.1 million, or a decrease of 260,000. The number of people unemployed rose from 7 million to 7.2 million, while 239,000 people exited the labor force.

The labor force participation rate and the employment-population ratios both fell:

The two month revisions were godawful as well, with May falling from +144,000 to +19,000 and June decreasing from +147,000 to +14,000. Bottom line: The labor market is a lot weaker than the Fed is giving it credit for.

The Fed’s dual mandate it to target PCE Price Inflation along with unemployment. The unemployment rate is being held down by people exiting the labor force, which is not indicative of a healthy job market. We have had a solid string of job losses in professional and business services, which is Ground Zero for AI.

WSJ reporter Nick Timaros quietly signaled to the markets that a September rate cut is unlikely. “Officials are betting they can afford to wait at least two months for clarity on whether tariffs will slow economic activity, fuel inflation, or pass by with little effect. That patience comes with risks—on both sides.”

Two months = August and September. Meanwhile, the labor market continues to deteriorate.

The bright side is that the yield curve is beginning to do the work for the Fed. The 10 year is now at the lower band of the Fed Funds target rate, which means we are looking at an inversion. So mortgage bankers can take at least some solace.

Vital Statistics:

Stocks are higher this morning after good numbers from Meta and Microsoft, along with a slew of new trade deals. Bonds and MBS are down small.

As expected the Fed maintained interest rates at current levels. “Although swings in net exports continue to affect the data, recent indicators suggest that growth of economic activity moderated in the first half of the year. The unemployment rate remains low, and labor market conditions remain solid. Inflation remains somewhat elevated.”

There were two dissenters in the decision – Michelle Bowman and Chris Waller, who wanted to cut rates by 25 basis points. In the press conference, Powell said “The economy is not performing as though restrictive policy were holding it back inappropriately….The economy is in good shape, but it’s an unusual situation in that you have risks to both sides of the mandate,” referring to the Fed’s dual goal of keeping both prices and unemployment low.

That bolded sentence is important since it implies that the Fed thinks r-star might be higher than current conventional wisdom suggests. The Fed Funds futures are taking it that way – they went from seeing a 60% chance of a rate cut in September to seeing a 40% chance now. A month ago, the futures saw a 95% chance of a September cut. The December futures now only see one cut this year.

The Fed’s body language seems to be saying that it won’t cut rates unless the economy is weakening markedly. If unemployment starts pushing 5%, they will cut; otherwise, no dice.

Personal incomes rose 0.3% in June, and personal consumption expenditures rose 0.3% as well. The personal income number was higher than expectations, while spending was lower.

The PCE Price Index increased from 0.1% to 0.3%, while the core rate was unchanged at 0.3%. On an annual basis, the PCE Price Index rose 2.6%, while the core rate rose 2.8%.

Pending Home Sales fell 0.8% last month according to NAR. On a YOY basis, pending home sales fell 2.8%. “The data shows a continuation of small declines in contract signings despite inventory in the market increasing. Pending sales in the Northeast increased incrementally even though home price growth in the region has been the strongest in the country,” said NAR Chief Economist Lawrence Yun.

Home prices rose 2.3% YOY in May, according to the Case-Shiller Home Price Index. New York was the leader, rising 7.4% while Tampa was the worst falling 2.4%. “Monthly trends also signaled broad-based fatigue. All three headline indices rose just 0.4% on a nonseasonally adjusted basis, the slowest monthly gain since January. After seasonal adjustment, each declined 0.3%, marking the third consecutive month of seasonally adjusted declines for the National
Composite.

Only four cities – Cleveland, Minneapolis, Charlotte, and Tampa – showed month-over-month acceleration, pointing to waning momentum breadth even as most cities still registered nominal gains. Seasonal momentum is proving weaker than usual, and the slowdown is now more than just a story of higher mortgage rates,” Godec concluded. “It reflects a market recalibrating around tighter financial conditions, subdued transaction volumes, and increasingly local dynamics. With affordability still stretched and inventory constrained, national home prices are holding steady, but barely.”

Job cuts ticked up in July, according to outplacement firm Challenger, Gray and Christmas. “We are seeing the Federal budget cuts implemented by DOGE impact non-profits and healthcare in addition to the government. AI was cited for over 10,000 cuts last month, and tariff concerns have impacted nearly 6,000 jobs this year,” said Andrew Challenger, Senior Vice President and labor expert for Challenger, Gray & Christmas.