Weekly Market Update

Hi, this is Dave Lindsey with your weekly market update.

As widely expected, the Federal Reserve raised its benchmark Federal Funds Rate by 25 basis points. This was the Fed's first rate hike in three years and its first rate change this year, following five consecutive meetings with no change.

Keep in mind, the Fed Funds Rate is the overnight rate banks charge each other and is not the same as mortgage rates.

The decision was unanimous, with the Fed pointing to elevated inflation as a key reason for the move. The latest projections also suggest another rate hike could come this year, with 16 of 18 officials projecting a higher Fed Funds Rate by year-end.

In housing news, new construction cooled in August, while builder confidence remained subdued. Higher mortgage rates, labor shortages, and elevated construction costs continue to weigh on builders.

The resale market showed a modest improvement. Pending home sales rose 0.3% from July to August, but remained 4.7% below a year ago. Even with higher mortgage rates, buyers are still moving forward. NAR Chief Economist Lawrence Yun said buyers were "steadily entering into contracts" last month.

Looking at the broader economy, retail sales jumped 1.2% in August, with 12 of 13 retail categories reporting gains. Initial unemployment claims remained relatively low at 196,000, while continuing claims stayed elevated at 1.73 million.

If you’re thinking about buying a home, refinancing, or simply have questions about today’s market, I’m happy to help.