Sternlicht Says Housing Is a 'Stuck Pig' Amid Current Rates
"Every day that (Fed Chair) Powell keeps rates this high he creates further shortages in the housing market," Starwood Capital Group Chair and CEO Barry Sternlicht says at The Milken Institute Global Conference in Beverly Hills, California.
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Pre-Markets Flat Ahead of CPI, PPI & Possible Trade Deals
Monday, June 9, 2025In terms of scheduled economic reports, we're starting off a new trading week slowly. Pre-market futures are up marginally across the board — Dow +44 points, S&P 500 +9 and the Nasdaq +17 points. Overall, these indexes are roughly flat year over year, although the S&P 500 grew above 6K for the first time since late negotiations between China and the U.S. have remained ongoing, and while we have no new details emerging at this hour, we still see a pending rare-earth minerals deal between China and the top three automakers in the U.S., which will help facilitate auto building and deliveries this year. That said, a comprehensive trade deal between the world's two biggest economies remains elusive. The current deadline before announced tariffs manifest themselves is July 9th. Our week's biggest market data comes mid-week, when on Wednesday morning the May print for Consumer Price Index (CPI) is expected to remain steady at +0.2%, with year-over-year up 20 basis points (bps) from a month ago to +2.5%. On the core side — stripping out volatile food and energy prices — analysts see headline up 10 bps to +0.3%, +2.9% on core year over year, also up 10 headline CPI is also known as the 'Inflation Rate,' and April's +2.3% marks the low point over the past year. We hadn't been lower on this metric since way back in February on 2021, at the foothills of the Great Reopening. This is as close as we have been to the Fed's optimal +2% inflation rate. May's Producer Price Index (PPI) comes out Thursday morning, and this is expected to revert back to positive +0.2% from April's multi-year low -0.5%. (This was the deepest cut to PPI since April 2020 — near ground-zero of the Covid pandemic.) A +0.2% gets us back to where we were in February of this year. Year-over-year PPI on headline reached +2.4% in April, with core year over year +3.1%. This sounds bad relative to the near-2% levels of these other price indexes, but keep in mind core PPI year over year back in March was up to +4.0% — notching a 2-year high. Much of this information contains some tariff 'noise' that makes these indexes harder to view clearly. While we acknowledge that calendar Q1 earnings season has wrapped up, are earnings reports ever really 'done'? This week, on Wednesday afternoon, brings us Oracle ORCL results for fiscal Q4, which expects modest earnings growth on +8.8% in quarterly revenues. Thursday after the bell we'll hear from Adobe Systems ADBE and RH RH, formerly Restoration Hardware. Adobe is expected to fetch double-digit earnings growth, while RH's loss per share is expected to come down considerably. (You can see the full Zacks Earnings Calendar here.)Questions or comments about this article and/or author? Click here>> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Oracle Corporation (ORCL) : Free Stock Analysis Report Adobe Inc. (ADBE) : Free Stock Analysis Report RH (RH) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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There's a record $700 billion of homes for sale in the US. Here's why the market is still frozen.
2025 was supposed to be a better year for the US housing market. But midway through, it's still stuck in low gear. After the worst year for home sales since 1995, there are scant few signs of life in the market. Even a record amount of unsold inventory hasn't lured buyers in. According to Redfin data released this month, sellers in the US are sitting on $700 billion of unsold housing stock, the highest dollar amount ever. Going by the number of homes for sale across the country, inventory is at a five-year high. Also, 44% of listings — or about $331 billion worth of homes for sale — have been on the market for over 60 days, the highest share since 2020. So, where are all the homebuyers? Rates and prices aren't budging It's not the usual order of events. Often, with a deluge of inventory, prices edge down, but they're still creeping higher. In April, Redfin said prices rose 1.4% nationally even as the number of homes for sale jumped almost 17%. "House hunters are only buying if they absolutely have to, and even serious buyers are backing out of contracts more than they used to," a Redfin real estate agent in Denver said. Apart from prices, the other factor is mortgage rates. They're still too high for most buyers to stomach. The 30-year mortgage, which is tied to the 10-year Treasury yield, has barely budged this year. It's hovering just below 7%, and top forecasters expect the rate to end this year only slightly lower. Goldman Sachs analysts last week said they see the rate on the most popular home loan dipping to 6.75% by year-end, from 6.9% currently. After analysts initially predicted rates to cool this year as inflation ebbed and the Federal Reserve loosened monetary policy, forecasts have jumped again. That's because the uncertain impact of Donald Trump's tariff policy has led to a repricing in the bond market and scrambled predictions for the Fed to cut rates. Markets now see the first cut of 2025 coming in September, according to the CME FedWatch Tool. Economic anxiety A gap between the "soft" and "hard" data points has been a big theme this year, with weak consumer sentiment and inflation expectations at odds with the backward-looking data that the Fed uses to inform policy. The general feeling of anxiety stemming from things like tariffs, the path of inflation, and the overall economy is fueling the weak demand in the US housing market. "In an instance like today, where markets are simply volatile, but not necessarily declining, that pure uncertainty also has a dampening effect on the housing market," Redfin's head of economic research, Chen Zhao, wrote in a separate report last month. Zhao continued: "First, bond market volatility directly increases the difference between 30-year mortgage rates and 10-year treasury yields, pushing mortgage rates up." Consumers and investors will get key updates on inflation and sentiment this week. May inflation data is due out on Wednesday, while the latest consumer sentiment reading will be published on Friday.
