SVN® International Corp. Economic Update – Keeping our clients up-to-date about the latest real estate landscape trends.
In July, the US Consumer Price Index (CPI) rose by 0.2% from June, reversing a previous decline, while annual inflation slowed to 2.9%. Core-CPI, excluding food and energy, also increased by 0.2% monthly and 3.2% annually, indicating a slight deceleration from June. This ongoing inflation trend, coupled with recent labor market cooling and economic uncertainty, supports the expectation of a Federal Reserve rate cut in September. Futures markets are now pricing in a 100% probability of this cut, though initial concerns about an emergency inter-meeting reduction have largely dissipated.
Despite recent volatility in market expectations, with fluctuations between a 25-basis point and a 50-basis point cut, current forecasts point to a likely 25-basis point reduction. July’s jobs report, showing slower job growth and a rise in unemployment to 4.3%, has heightened recession fears among some analysts, though others see the risk as limited. Homeownership rates among low-income households are rising, reflecting some positive shifts in housing and financial markets. Meanwhile, global REIT returns have improved slightly, with sector-specific performances varying widely, indicating ongoing adjustments within the real estate market.
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