The real estate market: 5 key themes to watch this week
A slew of economic data is due out in the coming days. Meanwhile, the Fed will make a decision about interest rates, and the trade deal deadline ends Aug. 1.
Key points:
- New consumer confidence, pending home sales and employment reports are expected out this week, along with updated inflation data.
- The Fed’s July 29-30 meeting may provide a clearer picture of how the central bank intends to handle interest rates during the second half of 2025.
- Tariff negotiations continue as the clock ticks down to President Donald Trump’s Aug. 1 trade deal deadline.
This week is a big one when it comes to forecasting what the real estate market will look like over the next few months.
Along with the Federal Reserve's July 29-30 meeting, a flood of data releases will show how the economy is doing overall. Tariff talk is expected to be intense as President Donald Trump's Aug. 1 trade deal deadline looms. New pending home sales data is also expected out this week, while key real estate brokerages will share their earnings reports from the second quarter.
Below are some points to consider regarding how all of this information will impact real estate.
Will the Fed lower interest rates?
The expectation is that the Fed will keep short-term interest rates unchanged on July 30 — and that Fed Chair Jerome Powell will keep his cards close to the vest regarding when rate cuts might start.
The Fed is waiting for clearer data on where inflation levels and the labor market are headed, according to Sam Williamson, senior economist at First American. The picture may become clearer after the Aug. 1 trade deal deadline.
What Powell has to say after the Fed announces its interest rate decision will be important, Williamson predicted.
"Chairman Powell's press conference remarks will be closely scrutinized, as investors seek signals on the timing and trajectory for the next rate cut. For now, the Fed appears committed to holding the line — balancing inflation risks with the need to support a slowing, but still-strong economy," Williamson said.
Trade deals and negotiations
Earlier this week, the U.S. announced a framework trade deal with the European Union. Meanwhile, negotiations continue with China as the clock ticks down to Trump's Aug. 1 deadline.
CNN reports that U.S. markets are very fixated on the final numbers and that a going rate beyond 20% could trigger a downturn on Wall Street. The average tax that U.S. importers are paying was around 18% prior to the deadline.
What economic data is worth watching?
The next consumer confidence report is due out on July 29. Real estate experts are interested in this information because the recent downturn in consumer confidence appears to have factored into buyers' decision to stay on the sidelines during the slow spring market.
The median index score forecast for July is 95.4, which would be an uptick from 93 in June. Last month's drop (from 98.4 in May) was unexpected as tariff concerns weighed on consumers despite temporary rollbacks amid trade deal negotiations.
Reports on gross domestic product, jobless claims and personal income and spending are also expected out this week, followed by the U.S. employment report on Aug. 1. New data on construction spending and auto sales will also be in the mix.
Forecasters are expecting fairly healthy spending and GDP numbers, and a slight softening in employment with an unemployment rate uptick. The Personal Consumption Expenditures (PCE) Index is something the Fed watches closely while weighing inflation.
What about pending sales?
It's possible that this week's forthcoming pending sales data could provide real estate professionals with some clarity amid the slow summer market.
Home sales have been sluggish, but mortgage purchase applications have been ahead of last year's pace. Are those applications leading to signed contracts? June's report suggested that was happening, so July's data will reveal whether that momentum has continued.
If it has, that should lead to a rebound in home sales for August and September. But if pending sales have slowed, that could suggest that the uptick in contract cancellations is having an impact.
A big week for earnings reports
Anywhere, RE/MAX, Compass and eXp are scheduled to show how they weathered the slow spring season this week as they disclose their second quarter earnings.
Compass and eXp, which have been on opposite sides of the debate over private listings, could get some interesting questions from investors during their earnings calls in addition to sharing their outlooks for the second half of 2025.