Tom Moeller

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Nonfarm private sector payrolls increased 324,000 (2.4% y/y) during July after rising 455,000 in June, revised from 497,000. A 173,000 increase was expected in the Action Economics Forecast Survey. The 349,000 average increase during the last three months was the quickest since August.

Growth in median annual pay for "job stayers" eased to 6.2% y/y last month from 6.4% in June and remained below a September high of 7.8% y/y. Last month’s earnings increase was led by 7.2% y/y growth in leisure & hospitality earnings, down from 16.9% y/y growth in March 2022. Education & health services pay increased a lessened 6.7%. Financial sector earnings rose 6.4% y/y, down from 7.8% in November while information sector pay rose 5.5% y/y, below the 8.0% peak in June 2022. Factory sector pay rose 5.7% y/y, down from a high of 7.8% in September 2022. Pay increases for “job changers” decelerated sharply and averaged 10.2% y/y, below the 16.4% peak in  June 2022.

Small businesses hiring (1-49 employees) rose 237,000 (1.5% y/y) following three increases which averaged 2151,000 per month. Employment at firms with 50-499 employees rose 138,000 (4.1% y/y), about the same as it did in each of the prior three months. Employment at large-sized firms fell 67,000 (+0.8% y/y) last month, the third straight month of decline.

By industry group, goods-producing employment rose 21,000 (2.7% y/y) after a 124,000 June rise and a 107,000 May increase. Hiring in the natural resource & mining sector strengthened 48,000 (20.8% y/y) following five straight months of strong gain. Construction employment improved 9,000 (4.8% y/y), also following five months of firm increase. Factory sector jobs declined 36,000 (-0.9% y/y), the fifth consecutive monthly decline.

Service-producing jobs rose 303,000 last month (2.3% y/y) after a 331,000 June surge. The number of leisure & hospitality jobs jumped 201,000 (9.5% y/y) after rising 225,000 in June and 204,000 in May. Information sector employment rose 36,000 (-1.2% y/y) after a two months of decline. Trade, transportation & utilities payrolls rose 30,000 (1.4% y/y) in July, about as they did in each of the prior three months. Education & health service s employment rose 12,000 (2.1% y/y) after increasing 75,000 in June. Education & health care sector employment rose 12,000 (2.1% y/y) after rising 75,000 in June. Professional & business services employment edged 5,000 higher (0.5% y/y) following five straight monthly declines. Elsewhere, payrolls declined. Financial activities employment fell 5,000 (-1.8% y/y), down for the eighth straight month.

By Census region, employment in the Northeast improved 276,000 (7.2% y/y) following a 246,000 June gain. Employment in the West increased 55,000 (2.8% y/y) in July, following a 45,000 June increase. Jobs in the Midwest rose 129,000 (3.2% y/y) after rising 161,000. In the South, the number of jobs declined 144,000 (-0.8% y/y), the sixth consecutive monthly decline.

The ADP National Employment Report and Pay Insights data can be found in Haver's **USECON** database. Historical figures date back to January 2010 for private employment. Pay data date back to October 2020. The expectation figure is available in Haver's **AS1REPNA** database.

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- Two-month change is strongest since last July. 
- Service sector hiring remains strong; goods increase weakens.
- Pay increase decelerates.

ADP Employment Strength Diminishes in July

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Mortgage applications fell 3.0% (-28.1% y/y) in the week ending July 28 after a 1.8% decline during the prior week, according to the Mortgage Bankers Association's Weekly Mortgage Applications Survey.

Applications for purchase loans fell 3.2% (-26.1% y/y) in the latest week following a 2.5% decline in the previous week. Applications for loan refinancing were off 2.5% (-32.3% y/y) following a 0.4% slip in the prior week.

The share of applications for refinancing an existing loan rose to 28.9% of total applications in the July 28 week from 28.7% in the prior week. It remained the highest share since the last week of March. Also rising, the adjustable-rate mortgage (ARM) share of activity of 6.5% in the latest week compared to 5.9% in the prior week.

The effective interest rate on a 30-year fixed-rate loan of 7.13% in the July 28 week compared to 7.06% in the prior week and a high of 7.42% in the third week of October 2022. The rate on a 15-year fixed-rate mortgage of 6.59% compared to 6.55% in the previous week. The rate on a 30-year Jumbo loan eased to 7.06% from 7.09% in the prior week. The rate on a 5-year ARM loan rose to 6.61% from 6.47% in the July 21 week.

The average size of a mortgage loan fell to $375,100 (+1.2% y/y) last week following a rise to $383,100 in the prior week. It was higher than the average of $347,600 at the end of last year. The average size of a purchase loan fell to $423,400 (+2.5% y/y) in the July 28 week after rising to $432,700 in the prior week. The average size of a loan to refinance a mortgage fell to $256,000 (-7.2% y/y) from $260,200 in the prior week.

The Mortgage Bankers Survey covers 75% of all U.S. retail residential mortgage applications and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks, and thrifts. The base period and value for all indexes is March 16, 1990=100. The figures for weekly mortgage applications and interest rates are available in Haver's **SURVEYS** database.

- Purchase & refinancing applications decline.
- Effective interest rates edge higher.
- Average loan size eases.

U.S. Mortgage Applications Fall Again as Interest Rates Rise

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The Autodata Corporation reported that light vehicle sales during July rose 1.3% (18.8% y/y) to 16.0 million units (SAAR) following a 4.3% June gain. Sales remain in an uptrend since a low of 12.38 million in September 2021.

Sales of light trucks rose 1.4% (19.1% y/y) during July to 12.76 million units after rising 5.1% in June. Purchases of domestically-made light trucks rose 0.9% (18.4% y/y) to 9.92 million units after increasing 4.7% in June. Domestic light truck sales have been rising from a September 2021 low of 7.25 million. Sales of imported light trucks gained 2.9% (21.9% y/y) to 2.84 million units after rising 6.2% during June.

Trucks' share of the light vehicle market was little changed at 79.8% last month versus 79.7% in June. It was the highest share since February.

Auto sales rose 0.9% (17.4% y/y) last month to 3.24 million units following a 1.3% June rise. Purchases of domestically-produced cars declined 2.6% (+19.3% y/y) to 2.29 million units after rising 1.7% in June. Sales of imported autos strengthened 10.5% (13.1% y/y) to 0.95 million after holding steady in June. July’s level was the highest since January.

Imports' share of the U.S. vehicle market rose to 23.7% in July from 22.9% in June. The share compared to 23.5% twelve months earlier. Imports' share of the passenger car market improved to 29.3% in July from 26.8% in June. It reached a high of 37.9% in September 2021. Imports' share of the light truck market rose to 22.3% in July from 21.9% in June.

U.S. vehicle sales figures can be found in Haver's **USECON** database. Additional detail by manufacturer is in the **INDUSTRY** database.

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- Light truck & auto sales both increase.
- Imports' market share improves.

U.S. Light Vehicle Sales Rise Further in July

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The ISM U.S. manufacturing PMI improved to 46.4 during July from 46.0 in June, according to the Institute for Supply Management. The July index remained below the expansion-contraction level of 50 for the ninth consecutive month and remained below its peak of 63.8 in March 2021. A reading of 46.7 had been expected in the Action Economics Forecast Survey for July.

The new orders index rose to 47.3 last month from 45.6 in June, continuing to suggest a lower orders level. A lessened 15.4% (NSA) of respondents reported higher new orders while 23.4% reported a decline. The production index rose to 48.3 in July after falling to 46.7, suggesting production contracted for the seventh month in the last eight. It stood well below a high of 67.0 in March 2021. A slightly higher 16.4% (NSA) of respondents reported higher production while 19.3% reported lower. The supplier delivery index improved to 46.1 from 45.7 in June. It was the highest level since November. A lessened 7.9% (NSA) of respondents reported slower delivery speeds while 15.8% reported faster. The inventories index rose to 46.1 from 44.0 in June. An increased 12.8% (NSA) of respondents reported more inventories and an increased 22.3% reported fewer.

Countering these increases, the employment series fell to 44.4 from 48.1 in June. It held below the break-even of 50 for the second straight month following two months above it. A greatly lessened 9.4% (NSA) of respondents reported higher employment while an increased 17.4% reported lower.

The prices paid index improved to 42.6 (NSA) in July from 41.8 in June. It was above a low of 39.4 in December 2022 but well below a high of 92.1 in June 2021. A higher 13.9% (NSA) of respondents reported higher prices while an increased 28.7% reported price declines.

In other ISM series not included in the composite index, the new export orders index fell to 46.2 in July after increasing to 47.3 in June. New export orders have contracted eleven times in twelve months. The imports index was little changed at 49.6 in July, but remained well below the level of 54.4 one year earlier. The order backlog index rose to 42.8 from 38.7 in June, indicating falling backlog levels for the tenth consecutive month.

The ISM figures are based on responses from over 400 manufacturing purchasing executives from 20 industries, which correspond to their contribution to GDP in 50 states. These data are diffusion indexes where a reading above 50 indicates expansion. The figures from the Institute for Supply Management can be found in Haver's **USECON** database; further detail is found in the **SURVEYS** database. The expectations number is available in Haver's **AS1REPNA** database.

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- Total index remains near three-year low.
- Widespread component increases countered by employment decline.
- Prices index edges higher from six-month low.

U.S. ISM Manufacturing Index improves Negligibly in July

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Retail gasoline prices jumped last week to an average $3.87 per gallon (-10.1% y/y) for all grades from $3.71 the week before. It was the highest price since the second week of November. Prices have ranged between $3.20 and $5.11 for the last year. The retail price for on-highway diesel fuel strengthened to $4.13 per gallon (-19.7% y/y) last week, up from $3.91 the previous week. Prices have ranged this past year between $3.79 per gallon and $5.81 per gallon.

The price of West Texas Intermediate crude oil averaged $79.60 per barrel (-19.2% y/y) in the week ended July 28 versus $75.59 per barrel in the prior week. The latest price remained below the high of $120.46 in the week of June 10, 2022. On Monday, the price was $81.80 per barrel. Brent crude prices rose to $83.55 per barrel last week (-23.5% y/y) from $79.48. The recent low price for Brent was $73.89 in the week of June 2, and the recent high was $127.40 in the week of June 10, 2022. Yesterday’s price was $85.22 per barrel.

Natural gas prices averaged $2.59/mmbtu (-70.4% y/y) in the week of July 28 versus $2.54 in the prior week. The price has ranged between a low of $1.93 in the first week of June to $8.95 in the second week of June 2022. Yesterday, the price was $2.58/mmbtu.

In the four weeks ended July 21, gasoline demand rose 2.6% from a year earlier after increasing 4.6% y/y in the prior four-week period. Demand for all petroleum products increased 2.2% y/y versus 1.0% y/y in the prior week. Crude oil input to refineries rose 0.5% in the latest four weeks from a year ago.

Gasoline inventories fell 3.3% y/y in the July 21 week after a 4.4% y/y decline in the prior week and residual fuel oil inventories fell 5.1% y/y after a 0.6% y/y gain in the prior week. Crude oil inventories including the Strategic Petroleum Reserve fell 10.4% from a year ago after an 11.3% y/y decrease in the prior week.

Measured in days’ supply, gasoline inventories in the week of July 21 were 24.1 days, up slightly from 23.9 days in the June 9 week. The recent high was 29.7 days in the third week of January and the recent low was 23.4 days in the last week of June. The supply of crude oil as of July 21 was 27.8 days, down from 27.9 days in the prior week. The recent high was 31.9 days at the beginning of March.

These data are reported by the Energy Information Administration of the U.S. Department of Energy. The price and supply/demand data can be found in Haver’s **WEEKLY** database.

- Gasoline prices surge to nine-month high.
- Crude oil prices increase.
- Natural gas prices continue to rise.

U.S. Energy Prices Strengthen

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The ISM-Chicago Purchasing Managers Business Barometer rose to a seasonally adjusted 42.8 during July after improving to 41.5 in June. Nevertheless, it has remained below 50 (the break-even point for rising vs. falling activity) for eleven consecutive months. The index peaked at 71.3 in May 2021. A reading of 43.2 had been expected in the Action Economics Forecast Survey.

Haver Analytics constructs an ISM-Adjusted Chicago Business Barometer with methodology similar to the ISM Composite Index. This measure fell to 41.4 in July from 43.0 in June, indicating a decline in business activity overall in recent months. The latest reading remains below a 64.4 high in October 2021.

The production measure improved to 45.1 after rising to 42.6 June. A steady 22% (NSA) of survey respondents reported higher production while a lessened 26% reported a decline. The new orders measure rose to 43.0 after holding fairly steady at 39.6 in June. A lessened 17% of survey respondents reported more new orders while a fewer 33% reported declines. The order backlog index improved to 35.8 from 33.1 in June. Just four percent of survey respondents reported higher backlogs while 30% reported a decline.

Working lower, the employment index fell to 39.7 after declining to 45.6 in June. It was the lowest level since February, down from the recent high of 51.2 in April. Twelve percent of respondents reported more hiring while 31% reported less. The inventories reading of 34.2 was reduced from 38.2 in June and stands well below its high of 66.6 in May of last year. Nine percent of respondents reported higher inventory levels while 41% reported a decline. The supplier-delivery series fell to 44.8 from 48.8 in June. A steady twelve percent of respondents reported slower delivery speeds while a higher 20% reported an increase.

Inflation pressures picked up in July. The prices paid index rose to 62.1 after falling to 53.5 in June. The index remained below the high of 94.6 in November 2021. A fairly steady 28% (NSA) of respondents reported an increase in prices, while a greatly lessened four percent reported lower prices.

The Chicago Business Barometer is considered to be a leading indicator of the U.S. economy. An indicator reading above 50 indicates expansion while below 50 suggests contraction. Summary data are contained in Haver's **USECON** database with detail including the ISM-style index in the **SURVEYS** database. The expectations figure from the Action Economics Forecast Survey is in the **AS1REPNA** database.

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- Index remains below expansion level.
- New orders & production indexes rise; employment declines.
- Prices paid index rebounds.

U.S. Chicago Business Barometer Improves 	Modestly in July

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Personal consumption expenditures (PCE) increased 0.5% during June (5.4% y/y) following a 0.2% May rise, revised from 0.1%. A 0.4% gain had been expected in the Action Economics Forecast Survey. Adjusted for price increases, real PCE rose 0.4% after gaining 0.1% in May. The y/y rise of 2.4% in real PCE was the strongest since February.

Real spending on durable goods rose 1.7% (4.7% y/y) in June after slipping 0.3% in May. Spending on motor vehicle & parts rose 2.2% (7.1% y/y) after falling 3.2% in May. Real spending on furniture & appliances rose 1.2% (2.0% y/y) after strong gains in both of the prior two months. Real spending on recreational goods & vehicles surged 1.8% (6.9% y/y), about as it did in May.

Real spending on nondurable goods rose 0.4% last month (0.6% y/y) after easing 0.1% in May. Real apparel spending improved 0.2% (-0.3% y/y) after a 0.1% slip. Outlays on gasoline & other energy products surged 1.6% (4.9% y/y) last month following a 0.2% decline in May while real food & beverage outlays were little changed (-1.5% y/y) following a 0.1% gain.

Real spending on consumer services edged 0.1% higher (2.5% y/y) in June after a 0.2% May rise. Financial services & insurance expenditures surged 1.3% (3.6% y/y) after a 0.4% May increase. Recreation services buying rebounded 1.3% (4.5% y/y) after falling 0.6% in May but real hotel & restaurant spending slipped 0.1% (+1.9% y/y) following a 0.3% improvement. Real transportation services outlays fell 0.6% (+2.0% y/y) after two months of strong increase while real housing & utilities expenditures eased 0.1% (+1.2% y/y) and reversed the May improvement. Real healthcare spending gained 0.1% (6.0% y/y) in June for the second consecutive month.

Personal income rose 0.3% (5.3% y/y) after increasing 0.5% in May, revised from 0.4%. A 0.5% rise had been expected. The gain reflected a 0.6% increase (6.0% y/y) in wages & salaries which followed a 0.5% increase in May. Proprietors' income rose 0.3% (3.7% y/y) last month after rising 0.2% in May. Rental income rose 0.4% (9.5% y/y) after two consecutive 0.3% gains. Receipts on assets fell 0.2% (+4.4% y/y) after two straight 0.5% gains. Interest income rose 0.7% (7.0% y/y) for the third consecutive month but dividend income declined 1.2% (+1.6% y/y) following a 0.2% gain. Personal transfer receipts eased 0.1% (+4.6% y/y) in June after rising 0.4% in May.

Disposable personal income rose 0.3% (7.9% y/y) in June following a 0.5% rise in May. Taxes rose 0.1% (-9.5% y/y) after holding fairly steady in May. Real disposable earnings rose 0.2% (4.7% y/y) last month, following a 0.4% May gain.

The personal savings rate fell to 4.3% in June from 4.6% in May. It remained near the highest rate since January 2022 and higher than the 2.7% low in June 2022. The level of personal savings fell 4.6% (70.3% y/y) last month.

The PCE chain price index rose 0.2% (3.0% y/y) last month after a 0.1% May gain. The index excluding food & energy rose 0.2% (4.1% y/y), the smallest increase since November and down from the 0.6% August high. Goods prices eased 0.1% (-0.6% y/y), as they did in May, while services prices gained 0.3% (4.9% y/y), also as they did in May. The PCE services price index excluding energy & health care increased 0.3%, down from highs of 0.7% in both August & September of last year. Its 5.9% y/y change is reduced from a 6.7% February high. Energy prices rose 0.6% (-18.9% y/y) in June following a 3.8% decline, while food prices edged 0.1% lower (+4.6% y/y) after little change during the prior three months.

The personal income and consumption figures are available in Haver's **USECON** database with detail in the **USNA** database. The Action Economics forecasts are in **AS1REPNA**.

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- Real spending rise is the strongest since January.
- Wage & salary growth remains strong.
- Growth in price index decelerates sharply y/y.

U.S. Personal Spending Picks Up but Income Slips in June; Inflation Edges Higher

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Real GDP grew 2.4% (SAAR) during Q2’23 following a 2.0% rise in Q1. The gain marks the fourth consecutive quarter of growth. GDP grew 2.6% y/y, the strongest four quarter advance since Q1’22. A 1.9% gain for Q2 was expected in the Action Economics Forecast Survey.

The change in business inventories added 0.14 percentage point to GDP growth last quarter following a 2.14 point subtraction in Q1. The foreign trade deficit subtracted 0.12 percentage point following a 0.58 point addition in Q1. Exports fell 10.8% (+1.5% y/y) after rising 7.8% while imports declined 7.8% (-4.8% y/y) following 2.0% growth in Q1.

Final sales to domestic purchasers grew 2.3% in Q2 (2.0% y/y) following a 3.5% gain in the previous quarter. Consumer spending growth slowed to 1.6% (2.3% y/y) from 4.2%. Durable goods outlays edged 0.4% higher, as motor vehicle buying fell 7.6% (+5.2% y/y). Furniture & appliance outlays rose 1.2% (1.3% y/y) while spending on recreational products jumped 10.0% (5.4% y/y). Purchases of nondurable goods rose 0.9% (0.5% y/y) as spending on gasoline & oil jumped 13.1% (3.4% y/y) but food & beverage outlays fell 0.3% (-1.2% y/y). Clothing outlays declined 6.0% (-0.6% y/y). Spending on services rose 2.1% (2.6% y/y) as transportation services outlays jumped 9.8% (1.5% y/y) following three straight quarters of decline. Housing & utilities outlays rose 3.2% (1.1% y/y) and expenditures on health care gained 2.8% (6.2% y/y). Recreation spending rose 1.7% (4.0% y/y), but outlays at hotels & restaurants fell 2.9% (+2.2% y/y).

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Nonresidential fixed investment strengthened 7.7% (4.6% y/y) after improving 0.6% in Q1. Nonresidential structures strengthened 9.7% (9.1% y/y), while equipment investment increased 10.8% (1.9% y/y). Transportation equipment investment surged 55.7% (30.9% y/y). Information processing equipment outlays rose 1.4% (-5.7% y/y) but outlays on industrial equipment fell 2.7% (-1.2% y/y). Intellectual property product spending improved 3.9% (5.0% y/y), about the same as in Q1.

Showing continued weakness last quarter was residential investment which fell 4.1% (-15.8% y/y). That was about the same shortfall in Q1 and the ninth consecutive quarterly decline.

Government purchases of goods and services increased 2.6% (3.8% y/y) after a 5.0% surge in Q1. Federal government purchases grew 0.9% (4.1% y/y) after two straight gains near 6% while state and local government purchases grew 3.6% both q/q and y/y.

There was less inflation in Q2. The GDP price index increased 2.2% following a 4.1% Q1 gain.  It was the weakest rise in three years and lowered the y/y gain to 3.6%, down from its 7.6% high in Q2 2022. The Action Economics Forecast Survey expected a 3.0% rise. The PCE chain price index rose 2.6% (3.7% y/y) following a 4.1% rise. The PCE price index less food and energy rose 3.8% (4.4% y/y) following a 4.9% increase. Prices for nonresidential fixed investment rose just 1.2% (4.8% y/y) after a 7.2% gain. Residential investment prices eased 0.7% (+2.4% y/y) after falling 2.5%.

The GDP data can be found in Haver's **USECON** and **USNA** databases. **USNA** contains virtually all of the Bureau of Economic Analysis detail in the national accounts. Both databases include tables of the newly published not seasonally adjusted data. The Action Economics consensus estimates can be found in **AS1REPNA**.

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- Growth led by business investment; consumer spending growth cools.
- Inventories & foreign trade little changed.
- Price gains moderate.

U.S. GDP Growth Strengthens in Q2

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The Pending Home Sales Index from the National Association of Realtors (NAR) rose 0.3% during June (-15.6% y/y) after a 2.5% May decline, revised from -2.7%. The index stood 40.0% below its August 2020 high of 128.0 and was the lowest since December of last year.

The decline in sales occurred as the average rate on a 30-year mortgage rose to 6.71% last month from 6.43% in May. That was the highest monthly average since 6.81% in November of last year. The rate rose to 6.81% last week.

In the Midwest, sales rose 4.3% in June (-17.1% y/y) after falling 5.3% in May. Sales in the Northeast edged 0.6% higher last month (-16.7% y/y) after rising 12.9% in May. Offsetting these gains, pending home sales in the South weakened 1.4% (-14.3% y/y) in June after falling 4.2% in May. In the West, pending home sales declined 1.0% (-15.5% y/y) last month after a 6.3% May decline.

The pending home sales index measures sales at the time the contract for the purchase of an existing home is signed, similar to the Census Bureau's new home sales data. In contrast, the National Association of Realtors' existing home sales data are recorded when the sale is closed, which is usually a couple of months after the sales contract has been signed. In developing the pending home sales index, the NAR found that the level of monthly sales contract activity leads the level of closed existing home sales by about two months.

The series dates back to 2001 and are available in Haver's **PREALTOR** database. Weekly mortgage interest rates from the Mortgage Bankers Association can be found in the **SURVEYW** database.

- Negligible rise follows three monthly declines.
- Changes are mixed amongst regions.

U.S. Pending Home Sales Improve in June

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At today’s meeting of the Federal Open Market Committee, the target for the federal funds rate was raised to 5.25% - 5.50%. The increase from 5.00% - 5.25% followed no action at the last FOMC meeting. The rate has been lifted from near zero in March 2022. Each member of the FOMC voted in favor of today’s action.

In a statement accompanying today’s meeting, the Fed indicated “Recent indicators suggest that economic activity has been expanding at a moderate pace. Job gains have been robust in recent months, and the unemployment rate has remained low. Inflation remains elevated. The Committee is strongly committed to returning inflation to its 2 percent objective.”

In addition, “Tighter credit conditions for households and businesses are likely to weigh on economic activity, hiring, and inflation. The extent of these effects remains uncertain.”

The statement also indicated that “the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in its previously announced plans.”

The press release for today’s FOMC meeting can be found [here](https://www.federalreserve.gov/newsevents/pressreleases/monetary20230726a.htm).

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- Federal funds rate range raised to 5.25% - 5.50%.
- Rate is highest since March 2001.
- Fed’s focus remains on reducing inflation.

FOMC Increases Funds Rate As Expected

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New single-family home sales fell 2.5% (+23.8% y/y) during June to 697,000 units (SAAR) from 715,000 during May, revised from 763,000, according to the U.S. Census Bureau. The Action Economics Forecast Survey expected a sales increase to 735,000. Sales remained below the peak of 1.029 million in August 2020.

By region, sales in the Northeast rose 20.6% (141.2% y/y) to 41,000 in June, but they remained below the high of 53,000 in March. Sales in the South rose 4.3% (21.4% y/y), up for the third straight month. To the downside, new home sales in the Midwest declined 28.4% (-13.1% y/y) to 53,000, the lowest level since November of last year, following two months of increase. Sales in the West weakened 13.9% (+34.9% y/y) and reversed the May gain.

The median price of a new home eased 0.5% (-4.0% y/y) to $415,400 in June following a 1.6% May rise. The price has fallen 16.4% since its October peak of $496,800. The average sales price of a new home rose 1.2% (4.8% y/y) to $494,700 after two straight months of decline. These sales price data are not seasonally adjusted.

The number of new homes on the market rose 0.7% (-3.6% y/y) to 432,000 in June and reversed May’s decline. These figures are below the 466,000 high in November 2022 but well above a low of 281,000 in October 2020. The seasonally adjusted months' supply of new homes for sale rose to 7.4 months in June. It remained down from a high of 10.1 months in July 2022 but remained well above its record low of 3.3 months in October 2020.

The median number of months a new home stayed on the market slipped to 2.7 months in June, about where it’s been since February. The reading remained up from the record low of 1.5 months in both September and October of last year but down from a high of 5.1 months in March 2021. These figures date back to January 1975.

New home sales activity and prices are available in Haver's **USECON** database. The consensus expectation figure from Action Economics is available in the **AS1REPNA** database.

**The Pros and Cons of Housing Market Investors** from the Federal Reserve Bank of Philadelphia is available [here](https://www.philadelphiafed.org/the-economy/the-pros-and-cons-of-housing-market-investors).

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- Sales fall after three months of strong increase.
- Regional sales patterns are mixed.
- Median sales price retraces much of May’s increase.

U.S. New Home Sales Decline & Prices Slip in June

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Mortgage applications fell 1.8% (-25.0% y/y) in the week ending July 21 after a 1.1% increase during the prior week, according to the Mortgage Bankers Association's Weekly Mortgage Applications Survey.

Applications for purchase loans fell 2.5% (-22.9% y/y) in the latest week following a 1.3% decline in the previous week. Applications for loan refinancing slipped 0.4% (-29.6% y/y) following a 7.3% increase in the prior week.

The share of applications for refinancing an existing loan rose to 28.7% of total applications in the July 21 week from 28.4% in the prior week. It remained the highest share since the last week of March. In contrast, the adjustable-rate mortgage (ARM) share of activity fell to 5.9% in the latest week from 6.6% in the prior week.

The effective interest rate on a 30-year fixed-rate loan of 7.06% in the July 21 week compared to 7.07% in the prior week and a high of 7.42% in the third week of October 2022. The rate on a 15-year fixed-rate mortgage of 6.55% compared to 6.54% in the previous week. The rate on a 30-year Jumbo loan edged higher to 7.09% from 7.08% in the prior week. The rate on a 5-year ARM loan fell to 6.47% from a near-record 6.61% in the July 14 week.

The average size of a mortgage loan rose to $383,100 (+4.4% y/y) last week following a decline to $372,900 in the prior week. It was higher than the average of $347,600 at the end of last year. The average size of a purchase loan increased to $432,700 (+5.4% y/y) in the July 21 week after falling to $418,600 in the prior week. The average size of a loan to refinance a mortgage rose to $260,200 (-3.4% y/y) from $257,900 in the prior week.

The Mortgage Bankers Survey covers 75% of all U.S. retail residential mortgage applications and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks, and thrifts. The base period and value for all indexes is March 16, 1990=100. The figures for weekly mortgage applications and interest rates are available in Haver's **SURVEYS** database.

- Purchase applications decline and loan refinancing slips.
- Effective interest rate is little-changed w/w.
- Average loan size rebounds.

U.S. Mortgage Applications Fall as Interest Rates Steady

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