July 7, 2026 – The First Half of the Year Comes to a Close

Economic Commentary

The year 2026 has certainly been an eventful one and, believe it or not, we are only half-way through. Who knew that we would spend several months of our 250th anniversary year in a conflict over 6,000 miles away. That conflict had significant economic implications as prices for energy and other goods accelerated as shipping was interrupted for the duration of the conflict. This situation almost made us forget that we had plenty of economic uncertainty due to the on-again, off-again, on-again tariff debate.

And last week we received evidence of how the economy performed during the first half of the year in the form of the June jobs report.  During the month of June, the economy created 57,000 jobs.  In addition, the previous two months of jobs gains were revised downward by 74,000 jobs.  According to the Bureau of Labor Statistics (BLS), the economy has added just over 400,000 jobs during the past year, or an average of 36,000 jobs per month.  These numbers are subject to revision over the following two months.

The unemployment rate eased to 4.2% last month as the labor force participation rate fell and wages increased by 0.3% on a monthly basis. Wages also increased 3.5% year-over-year. Wage inflation is especially important at this juncture because of the recent increase in the inflation due to the aforementioned conflict.  When the Federal Reserve met a few weeks ago, there was plenty of speculation regarding possible interest rate increases during the second half of the year.  Hopefully as the effects of the conflict subside, the pressure will wane in this regard.  Overall, the jobs report was seen as a lukewarm report to end the first half of the year and may ease pressure on the Fed to raise rates in the coming months.

Weekly Interest Rate Overview

The Markets. Mortgage rates eased moderately in the past week as the markets continued to experience day-to-day volatility.  According to the Freddie Mac weekly survey, 30-year fixed rates fell to 6.43% last week from 6.49% the previous week. In addition, 15-year loans also decreased to 5.79%. A year ago, 30-year fixed rates averaged 6.67%, 0.24% higher than today. Attributed to Freddie Mac: “The 30-year fixed-rate mortgage eased slightly this week averaging 6.43%. With rates at a seven-week low and purchase demand continuing to edge higher, it’s an encouraging sign as prospective homebuyers respond to modest improvements in affordability.” Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

Real Estate News

A recent NAHB analysis found that fewer older homeowners are choosing to transition out of their homes or downsize, a trend known as the “silver tsunami.” This shift is limiting the expected wave of housing stock released, affecting the availability of homes for new buyers. A majority (79%) of the members of the Boomer and Silent generation, U.S. adults 65 years or older, are homeowners and currently own more than a third (34%) of owner-occupied housing units in the U.S. “As older Americans stay in their homes longer, the silver tsunami phenomenon won’t solve the housing shortage on its own; therefore, expanding the housing supply becomes more urgent, not less,” said NAHB Chairman Bill Owens, a home builder and remodeler from Worthington, Ohio. “We must create pathways for all generations who aspire to achieve homeownership by reducing barriers to housing attainability.” An NAHB analysis found that the “silver tsunami,” which generally releases housing stock, varies sharply by region. Coastal metros and popular retirement areas have both high shares of older households and a lower number of young adult households. NAHB also found that older homeowners tend to live in some of the most supply-constrained markets.  Another complicating factor of the silver tsunami narrative is the age of the housing stock held by older homeowners. In the top 100 metro areas, markets with larger shares of older homeowners also tend to have older housing stock. These homes are unlikely to be direct substitutes for newer construction, as when they enter the market, many may require significant renovation and, in some cases, redevelopment.  Source: NAMB

When real estate agents around the country describe housing market conditions where they are, their stories are increasingly unique to their particular areas. It’s a big shift – a return to the “all real estate is local” reality that held true up until the subprime bubble of the early aughts made everyone followers of a national housing market narrative. “There is no national market anymore at all,” said Selma Hepp, chief economist for real estate data firm Cotality.  “It’s all about locality, right? It’s sort of slow and steady on the national level, but there’s a lot going on when you look under the hood.”  In a recent report, Hepp wrote that “the national trend hides a complex and increasingly fractured regional landscape.”  Toni Moss, founder of housing consultancy EuroCatalyst, was one of the early analysts who called the subprime bubble decades ago. Moss agrees that trends in globalization and housing are reverting from the national and international stage to the local. Buyers and investors will increasingly have to weigh not just local job markets or weather or amenities, but also how safe those areas may be from natural disasters and regional disruptions. As the federal government increasingly cedes disaster relief to states and localities, Moss thinks that the burden of managing risk is “incrementally moving local – to regional and statewide levels, and to city and community levels,” she told USA Today.   Source: USA Today

Only 30% of Americans know their neighbors beyond a casual level, according to a new Rocket survey. Despite this, Americans value the importance of strong community, with nearly 80% saying strong neighborhoods improve their quality of life. 50 years ago, neighborhoods were the center of belonging, culture and identity, with 80% of Americans saying they were once places where people naturally connected. Today, that dynamic has dramatically shifted, with hesitation emerging as the most prominent barrier to connection. Four in 10 (41%) say knocking on a neighbor’s door feels too bold, while 22% say they feel awkward making the first move. “We have tools at our fingertips that connect us with anyone on the planet, but we don’t know the person next door,” said Sarah Tarraf, Senior Vice President of Knowledge & Data Insights at Rocket. “At the heart of this paradox is something very basic. People want connection, but they fear being intrusive and being rejected. Americans are ready to be better neighbors. They just want someone to lead the way.” Only 17% of Americans say they intentionally seek out neighborly interactions, yet 68% report receiving support from a neighbor in the past year. The data suggests that while people may not actively pursue connection, they still show up when it matters – 58% say they would turn to a neighbor in an emergency, and 65% feel comfortable offering help. Nearly 42% of Americans say people in their neighborhoods tend to keep to themselves. Part of that shift may be tied to the decline of traditional “third spaces” – neighborhood spots like restaurants, parks and libraries where connection once happened naturally.  Source: MP Daily