- The average 30-year fixed-rate mortgage reached 7.23% last week, the highest since the week of June 1, 2001, according to Freddie Mac. Higher borrowing costs and issues of affordability risk slowing growth in the housing market, which had begun to stabilize in recent months.
- Existing home sales fell 2.2% to 4.07 million units at the annual rate in July, the lowest since January. With sharply higher mortgage rates, homeowners are less willing to sell their existing homes, limiting inventories for sale. On a year-over-year basis, existing home sales have plummeted 16.6% from 4.88 million units in July 2022.
- New single-family home sales rose 4.4% to 714,000 units in July, the strongest reading since February 2022. Over the past 12 months, new home sales have soared 31.5%. With that said, growth in new home sales could cool notably with mortgage rates hitting 22-year highs.
- After rising for four straight months, new orders for durable goods dropped 5.2% in July, but the data were pulled sharply lower by weaker defense and nondefense aircraft and parts orders. Excluding transportation equipment, new durable goods orders rose 0.5%. On a year-over-year basis, new durable goods orders have risen a modest 3.8% since July 2022, or 1.1% over the past 12 months with transportation equipment excluded.
- Orders for core capital goods—a proxy for capital spending in the U.S. economy—edged up 0.1% to $73.63 billion, a new all-time high. Despite setting a record, core capital goods orders have flattened out in recent months, rising just 0.9% year-over-year.
- Manufacturing activity has contracted in nine of the past 10 months, and the rate of decline steepened in the latest data, with the S&P Global Flash U.S. Manufacturing PMI declining from 49.0 in July to 47.0 in August. Yet, respondents remained upbeat—albeit somewhat less so—in their assessments of future output.
- Regional surveys were mixed. The Kansas City Federal Reserve Bank’s manufacturing survey found that activity stabilized in August after contracting for four straight months, while manufacturers in the Richmond Fed’s district continued to cite a challenging environment.
- The Index of Consumer Sentiment declined from 71.6 in July, the best reading since October 2021, to 69.5 in August. The statement noted, “Consumers weighed a combination of positive and negative factors in the economy, which led to differing offsetting trends across demographic groups.”
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