Fed Lifts Rates by 0.75% Again to Fight Inflation but Housing Already in a Recession

The Federal Reserve raised federal funds by 75 points, targeting their 2.5% goal, thus making business and consumer costs higher.

According to NAHB, just about every housing indicator is showing signs of weakness, including seven straight months of declines for home builder sentiment. Single-family starts and permits both fell below a 1 million annual pace and to a two-year low in June, and new home sales also plunged in June, marking the second time that sales fell below a 600,000 annual pace since Oct. 2018. Adding in declines for pending home sales and rising sales cancellation rates clearly paints a picture of a weakening housing sector.

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