Consumer prices moderate
Inflation rose by 2.4% in May from a year ago, just below analyst expectations and a sign that Americans have yet to fully feel the effects of tariffs.
A 3.9% jump in shelter costs — such as mortgage payment, property taxes and rent — drove the Consumer Price Index increase, but a 12% drop in gas prices helped moderate the gain, the U.S. Bureau of Labor Statistics announced Wednesday.
The Federal Reserve won't consider cutting interest rates until inflation is at or below 2%, according to Lawrence Yun, chief economist for the National Association of Realtors.
"It has cited uncertainty regarding the tariff impact to monitor how prices play out in the coming months," Yun said in a statement. "Wall Street bettors are pointing to September as the first of several potential rate cuts."
Wells Fargo said in a report that it's "too early to declare victory" on the tariff front.
"Most of the tariff increases occurred over the March-May period, and we doubt enough time has elapsed for the full effects of these policy changes to be felt on output, hiring and pricing," the bank said in the report.
Homebuilders lobby lawmakers
More than 1,000 homebuilders and other industry professionals traveled to Capitol Hill on Wednesday and urged lawmakers to support policies that would increase affordable housing production.
The group, taking part in the National Association of Home Builders' 2025 Legislative Conference in Washington, D.C., supported a tax policy that promotes homebuilding and housing, according to the NAHB trade group.
The builders and professionals endorsed the CONSTRUCTS Act, pending legislation that helps prepare adults for careers in construction and other trades. They also spoke out against a federal minimum energy standard, saying it could raise costs and hurt buyers.
"The best way to ease the nation’s housing affordability crisis and boost housing production is to break down the barriers that are impeding new home and apartment construction,” NAHB Chairman Buddy Hughes said in a statement.
Commercial outlook bodes well for housing
Tariffs and other economic concerns aren't likely to derail the commercial real estate sector in the near term, according to a midyear report Wednesday from real estate services firm Cushman & Wakefield.
“Even now, amidst the uncertainty, the capital markets are continuing to thaw, capital is plowing back into the property sector, and leasing fundamentals are largely holding up well," said Rebecca Rockey, Cushman's deputy chief economist and global head of forecasting, in a statement. "With property, the devil is always in the details, and of course, risks have shifted to the downside given the macro uncertainty, but we are still seeing healthy trends in the data.”
Housing often follows trends in office, retail and other commercial sectors. U.S. office demand is improving, while retail foot traffic is returning to pre-pandemic levels in many markets, according to Cushman. Meanwhile, multifamily real estate, including for-sale housing, remains on solid footing with unit shortages driving construction, the report said.
