Inflation Steady, Home Sales Show Momentum

[Derek Brickley]

Inflation Steady, Home Sales Show Momentum

Week of September 22, 2025 in Review

Mortgage rates may be setting up for a fall as the Fed’s key inflation measure held steady last week. Meanwhile, housing data shows buyers are still active—and with rates easing, real estate agents could see more momentum heading into fall. Here’s what you need to know:

📊 Fed’s Inflation Gauge Holds Steady

August’s Personal Consumption Expenditures (PCE) index, the Fed’s go-to inflation measure, rose 0.3% month-over-month, nudging annual inflation from 2.6% to 2.7%. Core PCE, which strips out food and energy, increased 0.2% and stayed at 2.9% annually.

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👉 What this means for real estate: The Fed is balancing stubborn inflation with a softening job market. With last week’s September 17 rate cut already in place, the next jobs report (October 3) could set the tone for further moves. If data keeps cooling, expect mortgage rates to keep trending lower—good news for your buyers on the fence.

💼 Jobless Claims Show Labor Market Strain

Initial unemployment claims dropped to 218,000, the second straight decline after hitting a four-year high. Continuing claims dipped slightly to 1.926 million but have stayed above 1.9M for 18 weeks.

👉 For realtors: A cooler job market often nudges the Fed toward rate cuts. Translation: softer labor data may give buyers improved affordability as mortgage rates ease.

🏡 Existing Home Sales Edge Lower

Existing home sales slipped 0.2% in August to a 4M annual pace. Inventory fell slightly month-over-month but remains nearly 12% higher than a year ago, with 1.53M homes on the market.

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👉 For your buyers: This data reflects closings in August—before rates began dipping. NAR Chief Economist Lawrence Yun expects lower rates plus higher inventory to support stronger sales in the coming months. Now's the time to prep hesitant buyers.

🚀 New Home Sales Surge

Contracts for new homes jumped 21% in August to an annual pace of 800,000—the fastest since early 2022. July sales were also revised higher, showing builders are finally seeing momentum as mortgage rates trend lower.

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👉 For your clients: Demand is strong, but supply is tricky. Of the 490K new homes on the market, only 124K are completed and move-in ready. The rest are still being built, meaning finished inventory is tight. This could keep upward pressure on prices if rates fall further.

📈 GDP Beats Expectations

Q2 2025 GDP growth was revised up to 3.8%, a sharp rebound from Q1’s 0.6% drop. Consumer spending and fewer imports helped drive the stronger number.

👉 Market lens: A resilient economy keeps the Fed cautious—but if inflation cools and jobs data weakens, mortgage rates should still trend lower.

🍪 Family Hack of the Week

September 29 is National Biscotti Day—perfect excuse for homemade Pistachio Biscotti. Easy to bake, keeps well, and makes a great open house snack for clients.

📅 What’s Coming Up This Week

• Monday: Pending Home Sales
• Tuesday: Home Price Appreciation
• Tuesday: Job Openings (JOLTS)
• Wednesday: ADP Private Payrolls
• Thursday: Jobless Claims
• Friday: September Jobs Report (big one!)

Catch you next week, Derek Brickley #LoansbyDB