The economic outlook has shifted again over the past month. Some of the biggest pressures facing consumers and homebuyers appear to be easing, but we’re not out of the woods yet, and a few surprising housing trends suggest the market may have more momentum than many expected.
Read on for the important numbers to know, right now.
Number to know: $78
The first number to know this month: $78. That is the current price of a barrel of oil as of June 16, after falling about $30 in just the past month. Much of that decline follows from the signed memorandum of understanding between the U.S. and Iran, hopefully marking the beginning of the end of the war that has closed the straits of Hormuz.
Number to know: 4.2%
The second number to know this month: 4.2 percent. That is the current year-over-year pace of inflation as of May, and it’s the highest annual rate of inflation in over three years. It reflects the cost pressures from the Iran War disruptions still rippling out through the economy.
The Producer Price Index, which measures cost pressures further upstream in the supply chain, also continued accelerating in May, to 6.2 percent. Hopefully, this should begin to decelerate as lower oil prices bring down costs in the economy.
Bond yields are still elevated, but they’ve begun to decline — the 10-year Treasury yield has come back down about a quarter point from its peak in mid-May.
Similarly, 30-year mortgage rates are starting to come back down, but remain much higher than earlier this year: both Mortgage News Daily and Freddie Mac report average mortgage rates slightly above 6.5 percent.
Number to know: 5%
Speaking of the housing market, inventory growth slowed down again in May, which ended with just 2 percent more active listings than this time last year.
And most surprisingly, pending sales in May were up 5 percent year-over-year, according to Realtor.com, which marks a belated pickup in demand to close out the spring selling season on a higher note. If mortgage rates continue to come back down, that strength in sales activity could continue into the summer.
Jeff Tucker is the Principal Economist for Windermere Real Estate in Seattle, Washington. Connect with him on X or Facebook.
