🏠U.S. New Home Sales Plunge in May 2025 as Buyers Retreat Amid High Mortgage Rates
New single-family home sales in the U.S. fell sharply in May 2025, dropping 13.7% month-over-month to a seasonally adjusted annualized rate of 623,000 units, according to the U.S. Census Bureau. This marks the biggest decline since June 2022, far below market expectations of around 700,000 units.
📉 Housing Market Breakdown:
- South: -21% to 349,000 units
- West: -5.4% to 159,000 units
- Midwest: -7.1% to 78,000 units
- Median home price: $507,000 (+1.4%)
- Supply: 9.8 months at current sales pace
High mortgage rates and economic uncertainty are causing many potential buyers to delay purchases, signaling a cooling housing market despite rising prices.
đź“Š Stock Market Update: Tech Leads, Real Estate Lags
The S&P 500 rose 0.2% on Wednesday, while the Nasdaq 100 gained 0.4%, inching closer to a new all-time high. The Dow Jones remained near flatline levels.
Top Performers:
- Nvidia: +1.3%
- Apple: +1.2%
- Microsoft: +0.6%
- Amazon: +1.1%
- Meta: +0.2%
Underperformers:
- Real Estate sector (reflecting weak housing data)
- FedEx: -5% after disappointing profit forecast
Investor sentiment was buoyed by Fed Chair Jerome Powell’s dovish testimony before Congress, which reinforced expectations of at least two interest rate cuts by the end of 2025. In addition, a ceasefire between Iran and Israel helped calm global markets.
đź’µ Dollar Index Holds as Fed Signals Policy Flexibility
The U.S. Dollar Index (DXY) held steady at 98 on Wednesday, pausing its recent slide to multi-year lows.
Key Drivers:
- Powell’s remarks: Economic uncertainty justifies patience on interest rates
- Disinflation outlook: Maintained as long as no new tariffs are introduced (watch for July 9 deadline)
- Energy prices: Falling due to stability in the Strait of Hormuz, boosting bets on slowing inflation
Meanwhile, other major economies are also leaning toward monetary easing, helping to stabilize the greenback despite rate cut expectations in the U.S.
đź“Ś Final Thoughts: What to Watch Next
- Will housing weakness extend into summer?
- Can tech continue to lead the market higher?
- July 9 tariff decision will be critical for inflation and Fed policy
- Watch for inflation and jobs data to confirm (or challenge) rate cut bets
📬 Stay tuned for more market insights and economic updates.
📢 Don’t forget to share this post and leave a comment below with your thoughts on where the market is headed next!
