Rising material and labor costs weighed on new home sales last month as the sector has seen some slowdown in the past few months. June New Home Sales fell 6.6% in June from May to an annual rate of 676,000 units versus the 800,000 expected. Sales plunged in the Northeast, fell in the West and South with gains seen in the Midwest. The supply of new homes on the market rose to 6.3% while the median price of a new home sold in June was $361,800, up 6.1% from a year ago.
It's a big risk-event filled week with the two-day Fed meeting, heavy earnings, added supply, inflation and economic growth data along with key housing reports that will impact the markets this week. The 'Main Event' will be the two-day Fed meeting that kicks off on Tuesday and ends Wednesday with the 2:00 p.m. ET release of the monetary policy statement. There is a zero percent chance of a hike to the near-zero percent Fed Funds Rate ... BUT, what will the Fed convey regarding the recent surge in inflation.
The inflation reading Core PCE for June will be released on Friday. Will the Fed discuss if and when tapering will begin? We shall see. More on the subject Wednesday morning. The week will feature the first reading on Q2 2021 GDP where it is expected that growth rose by 8.5% from 6.4% in Q1. The Treasury will sell $60B 2-year notes today, part of $183B being offered this week. At the end of the week, the Fed's favorite inflation gauge, the Core PCE, will be released and will be closely watched by investors and Fed members.