Economists' Outlook

Inflation continued to rise quickly in July. Over the last 12 months the inflation rate rose 5.4%, the same annual rate as in June.

To prevent widespread evictions, the federal government provided $46.55 billion in emergency rental assistance (ERA) to eligible renter households through the Consolidated Appropriations Act of 2021 ($25 billion) and American Rescue Plan Act ($21.55 billion).

The job market continues to make progress, with nearly a million more employed in the latest month. Compared to the peak employment of the pre-pandemic period, another 5.7 million jobs are still needed, which could happen by the end of the year or in early 2022.

The 30-year fixed mortgage rate fell to 2.77% from 2.80% the previous week, which translates to more homebuyers being able to benefit from historically low mortgage rates.

Home listings data from Realtor.com as of June 2021 indicates that housing demand in outlying counties of metropolitan areas is growing at a more robust pace than in the central counties, although both outlying and central counties are performing remarkably well compared to pre-pandemic conditions.

Housing starts rose strongly in June, above 1.6 million units and housing inventory has also modestly improved in the last several months.

Mortgage rates rose slightly this week but remained below 3% for the fifth straight week. As of today, the average rate is clocking in at 2.93%.

The strong surge in consumer spending for travel and recreation in the wake of a big vaccination rollout and the relaxation of masking and social distancing guidelines pushed gross domestic product (GDP) to expand at an annualized rate of 6.4% in the second quarter, with Real GDP running at 2% above the pre-pandemic level.

During April 2020–March 2021, the dollar volume of U.S. existing homes purchased by foreign buyers fell 27% to $54.4 billion and the number of existing homes purchased fell 31% to 107,000 units compared to the levels in the prior 12-month period.

Mortgage rates dropped significantly this week, with the 30-year fixed mortgage rate falling to 2.78% from last week's 2.88%.