Category Archives: Finance & Economics

Elevated mortgage rates, higher inflation and economic uncertainty kept more buyers on the sidelines in April as ongoing affordability challenges continue. Sales of newly built single-family homes fell 6.2% in April to a seasonally adjusted annual rate of 622,000, according to data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. The pace of new home sales is down 11.3% from a year earlier. Mortgage interest rates increased from a monthly average of 6.18% in March to 6.33% in April per Freddie Mac, dampening homebuyer demand. Rates moved higher again in May to just above 6.4% as oil prices and short-term inflation expectations increased. New home sales are on track to decline in 2026 as mortgage rates are expected to remain elevated in the months ahead.

Real gross domestic product (GDP) increased at an annual rate of 1.6 percent in the first quarter of 2026, according to the second estimate released today by the U.S. Bureau of Economic Analysis. In the fourth quarter of 2025, real GDP increased 0.5 percent. The contributors to the increase in real GDP in the first quarter were exports, investment, consumer spending, and government spending. Imports, which are a subtraction in the calculation of GDP, increased. Real GDP was revised down 0.4 percentage point from the advance estimate, primarily reflecting downward revisions to investment and consumer spending.  Real final sales to private domestic purchasers, the sum of consumer spending and gross private fixed investment, increased 2.4 percent in the first quarter, revised down 0.1 percentage point from the previous estimate.

The National Association of Home Builders (NAHB) is debuting a new resource called the State Projections of Remodeling (SPR) that will provide a quarterly analysis of remodeling activity for each state in the nation based on total dollar volume, market share and change in remodeling spending. “We are pleased to unveil this new economic resource that will serve not only the remodeling sector, but the entire housing industry,” said NAHB Chairman Bill Owens, a home builder and remodeler from Worthington, Ohio. Based on a proprietary model developed by NAHB, the SPR on a quarterly basis provides a state-level estimation of the market share and total dollar value of remodeling spending. The SPR is a statistical model designed to use national quarterly improvement spending data and estimate remodeling market share by state using multiple indicators and NAHB’s annual state remodeling forecast.

According to NAHB analysis of quarterly Census data, the count of multifamily, for-rent housing starts increased year-over-year during the first quarter of 2026. For the quarter, 107,000 multifamily residences started construction. Of this total, 103,000 were built-for-rent. This built-for-rent total was 21% higher than in the first quarter of 2025.

With overall single-family construction down 5% for the first four months of 2026, custom home building has been a relative bright spot. With spec home building down and the stock market up, custom building has expanded its market share. There were 36,000 total custom building starts during the first quarter of 2026. This is up 3% relative to the first quarter of 2025.

Single-family built-for-rent construction fell back in the first quarter of 2026, as a higher cost of financing, increased multifamily supply and policy concerns over Congressional legislation related to institutional capital froze parts of the development market. 

US consumer sentiment fell for the third straight month as supply disruptions in the Strait of Hormuz continue to boost gasoline prices. Sentiment is now just below the previous historical trough seen in June 2022. The cost of living continues to be a first-order concern, with 57% of consumers spontaneously mentioning that high prices were eroding their personal finances, up from 50% last month. …Year-ahead inflation expectations inched up from 4.7% last month to 4.8% this month. The current reading substantially exceeds the 3.4% reading seen in February 2026 prior to the start of the Iran conflict, along with all 2024 readings. Long-run inflation expectations climbed from 3.5% in April to 3.9% in May, notably higher than the 2.8% to 3.2% range seen in 2024.

• Related in CNBC: US Consumer sentiment hits fresh record low in May

Mortgage rates this week rose to the highest level since August, more bad news for home shoppers during what is usually the busiest time of the year for home sales. The average rate on a 30-year fixed mortgage rose to 6.51% this week, from 6.36% last week, Freddie Mac said Thursday.  Higher mortgage rates and expensive home prices are keeping many would-be buyers on the sidelines. Rising costs in many places for home insurance and property taxes have also spooked buyers.  The rise in mortgage rates this year marks a reversal from the second half of 2025. …But that brief momentum has stalled. The war in Iran and subsequent rise in oil prices have led to worries about inflation and dampened expectations for the spring home-buying season. Existing-home sales were flat in April, well below economists’ expectations. …Mortgage rates look poised to keep rising. [to access the full story a WSJ subscription is required]

In a significant victory for NAHB and the broader housing sector, the US House of Representatives approved an amendment to the 21st Century ROAD to Housing Act that removes a build-to-rent (BTR) sales provision that would have hurt affordability and reduced much-needed housing supply. NAHB led the push to remove the provision, which would have required purpose-built single-family rental homes to be sold within seven years. According to NAHB and the Urban Institute, the measure could have cut rental housing supply by 40,000 to 72,000 units each year. It also would have displaced thousands of tenants annually, shrinking the rental market and putting further pressure on rents. At a time of severe housing challenges, BTR remains one of the few market segments adding tens of thousands of homes that otherwise would not be built. The amended House bill also includes several other NAHB-backed measures to boost housing production.

US housing starts declined in April as construction of single-family homes dropped by the most in nearly a year, suggesting builders are growing cautious amid higher mortgage rates. New residential construction decreased 2.8% last month to an annualised rate of 1.47 million homes, according to government figures released on Thursday. Starts of single-family homes declined 9%, the most since August, to an annualised 930,000 pace. Multifamily housing starts, however, rose more than 10% to the highest level since May 2023. The report also showed single-family permits, a leading indicator of future construction, fell 2.6% to the lowest level since August. The figures suggest home builders remain focused on working off a still-elevated inventory of new properties. …Numerous challenges remain for a sustained pickup in home building, including rising mortgage rates, flagging consumer confidence and stretched household budgets.

• Related in the Real Economy: US Housing recovery will not happen this year

US Home Builder confidence posted a modest gain in May even as buyers grapple with rising mortgage rates and economic uncertainty while builders continue to contend with elevated land, labor and construction costs. Builder confidence in the market for newly built single-family homes increased three points to 37 in May, according to the NAHB/Wells Fargo Housing Market Index (HMI). …The survey also revealed that 32% of builders cut prices in May, down from 36% in April. The average price reduction was 6%, up from the 5% figure in April. …All three of the major HMI indices posted gains in May, as some buyers who had been holding back decided to move forward this spring. The HMI index gauging current sales conditions rose three points to 40 from April to May, the index measuring future sales increased three points to 45 and the index charting traffic of prospective buyers posted a three-point gain to 25.

The House has introduced an NAHB-supported amendment to major housing legislation that would bring greater certainty to the housing market and increase the supply of attainable housing. The House amendment to the 21st Century ROAD to Housing Act that was spearheaded by House Financial Services Chairman French Hill and Ranking Member Maxine Waters makes three key improvements: Removes the forced sale of purpose-built single-family homes. …Increases and indexes multifamily loan limits. FHA-insured multifamily loan limits have remained static for 12 years and do not reflect market conditions. …Provides meaningful relief to community banks.

The amended legislation includes several additional measures to help increase housing production: HOME program reforms. Point-access buildings. …Publicly owned land database. ….[and] USDA infill environmental review exemption.  The House plans to vote on this amended package to the 21st Century ROAD to Housing Act as soon as the week of May 18. 

From March to April, the Producer Price Index (PPI) for the vast majority of commodities tracked by the US Census Bureau moved or up or down by single-digit percentages. Exceptions: Jet fuel increased 36.4%; Asphalt increased 29.4%; and softwood lumber increased 12.3%. Overall, the PPI for final demand increased 1.4% in April (seasonally adjusted), per the latest U.S. Bureau of Labor Statistics report. …The latest PPI report also sheds light on recent pricing movement for key building materials. Softwood lumber, which has seen supply tighten amid spiraling fuel costs and economic volatility, saw a sharp month-to-month bump (+12.3% from March to April 2026) after price drops early in the year. Despite the jolt, year-over-year prices for softwood lumber are just 0.9% higher than they were last year. …According to Associated Builders and Contractors, overall construction input prices are now 7% higher than one year ago, while nonresidential construction input prices are 7.4% higher.

US inflation accelerated to a nearly three-year high in April, driven by continued increases in energy costs from the Iran war. Energy costs drove more than 40% of the monthly increase, with national gasoline prices soaring above $4.50 in early May for the first time since July 2022. With energy costs straining household budgets and eroding purchasing power, this marks the first time inflation has outpaced wage growth since May 2023. As the ceasefire remains tenuous, energy prices are expected to remain elevated for months, continuing to put upward pressure on inflation and complicating the Fed’s path toward its 2% target. …On a non-seasonally adjusted basis, the Consumer Price Index (CPI) rose by 3.8% in April from a year ago, following a 3.3% increase last month, according to the BLS latest report. This was the largest annual increase since May 2023.

The Producer Price Index for final demand increased 1.4% in April, seasonally adjusted, the U.S. Bureau of Labor Statistics reported. Final demand prices advanced 0.7% in March and 0.6% in February. The April increase is the largest advance since rising 1.7% in March 2022. …U.S. producer prices for softwood lumber rose 12.3% in April and increased 0.9% over the past 12 months, according to the U.S. Bureau of Labor Statistics. April changes also included a 0.5% increase in hardwood lumber after a 0.1% decline in March. Millwork rose 0.7%, while plywood increased 1.2%.

The U.S. labor market continued to show resilience in April, with job growth persisting despite elevated interest rates and rising geopolitical uncertainty related to the Iran conflict. The unemployment rate held steady at 4.3%. Hiring gains were concentrated in health care, transportation and warehousing, and retail trade. Wage growth accelerated modestly in April, with average hourly earnings rising 3.6% year-over-year. …Employment in the overall construction sector rose by 9,000 jobs in April, following a downwardly revised gain of 16,000 in March. Within the industry, residential construction shed 10,400 jobs, while non-residential construction added 19,000 jobs. …The six-month moving average of job gains for residential construction remains negative, reflecting an average monthly loss of 2,333 jobs and declines in three of the past six months. However, over the last 12 months, residential construction has shed a net of 49,200 jobs, marking the 14th consecutive annual decline and the longest stretch of annual losses since the Great Recession.

Consumer sentiment was essentially unchanged this month, coming in a scant 1.6 index points below April’s reading and comparable to the trough reached in June 2022. While the expectations index inched up, current conditions fell back about 9%, owing to a surge in concerns about high prices both for personal finances as well as buying conditions for major purchases. Real income expectations continued a decline that began in March. …Year-ahead inflation expectations softened a touch from 4.7% last month to 4.5% this month. The current reading still substantially exceeds the 3.4% reading seen in February prior to the start of the Iran war, along with all 2024 readings and the 2.3-3.0% range seen in the two years pre-pandemic. Long-run inflation expectations inched down from 3.5% in April to 3.4% in May. In 2024, values ranged between 2.8% and 3.2%, while in 2019-2020, they were consistently below 2.8%.

MCLEAN, Virginia — Freddie Mac released the results of its Primary Mortgage Market Survey® (PMMS®), showing the 30-year fixed-rate mortgage (FRM) averaged 6.37%. “The 30-year fixed-rate mortgage averaged 6.37% this week,” said Sam Khater, Freddie Mac’s Chief Economist. “Recent data points to slightly better conditions for buyers with a boost in new-home sales, median new-home prices being down to their lowest level since July 2021, and higher inventory than in recent years. Together, these trends could modestly ease affordability pressures through the spring homebuying season.” …The 30-year FRM averaged 6.37% as of May 7, 2026, up from last week when it averaged 6.30%. A year ago at this time, the 30-year FRM averaged 6.76%.

There is a research gap in localized remodeling data. To address this, NAHB is debuting a new economic resource: the State Projections of Remodeling (SPR). …SPR will provide a quarterly, state-level estimation of the market share and total dollar value of remodeling spending one month after the release of the NAHB Remodeling Market Index (RMI). …During the fourth quarter of 2025, remodeling spending at the national level came in at $280.1 billion on a seasonally adjusted annualized rate (SAAR), accounting for 37.7% of total private residential fixed investment. Even though spending fell for the second consecutive quarter from $282.6 in Q3 2025, remodeling spending has been larger than single-family construction spending for five straight quarters. California had the largest market share of remodeling spending at 7.9%, or $22.1 billion. This is followed by Texas (7.0%, or $19.7 billion), Florida (5.5%, or $15.3 billion), New York (3.9%, or $11.0 billion), and North Carolina (3.0%, or $8.4 billion).

Annual spending on improvements and maintenance to owner-occupied homes is projected to slow sharply in early 2027, according to the latest Leading Indicator of Remodeling Activity (LIRA) from the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University. The new LIRA shows year-over-year growth in home renovation and repair spending of just 0.5% by the first quarter of 2027—a pace that remains positive in nominal terms but is less than overall inflation. “Growth in remodeling permits and retail spending on building products has been flat recently, signaling stagnant interest in home improvement,” said Rachel Bogardus Drew, Director of the Remodeling Futures Program at the Center. “Even so, homeowners are expected to maintain spending at roughly last year’s levels, with total improvement and repair expenditures edging up modestly to $523 billion in early 2027.” 

US mortgage rates continued to increase in April as ceasefire negotiations remain inconclusive. According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.34% in April, 16 basis points (bps) higher than March. The average 15-year rate also increased by 13 bps to 5.69%. Despite the recent increase, both rates remain lower than a year ago by 39 bps and 21 bps, respectively. The 10-year Treasury yield, a key benchmark for long-term borrowing, averaged 4.31%, up 7 bps from the previous month. Ongoing blockades in the Strait of Hormuz have kept oil prices above $100 per barrel. This has passed through to inflation which climbed to 3.3%, nearing a two-year high. Energy components led the increase with fuel oil prices rising 30.7% and gasoline up 21.2% in March. At its latest meeting, the Federal Reserve held the federal funds rates unchanged at 3.5% to 3.75% as inflation remains elevated alongside continued economic expansion. 

Following the April meeting of the Federal Open Market Committee (FOMC), the Federal Reserve opted to maintain its current stance, leaving interest rates unchanged. The target for the federal funds rate remains at a top level of 3.75%, where it has stood since December. This meeting may represent the final policy decision led by Jerome Powell in his role as Chair of the Fed’s Board of Governors, bringing his eight-year tenure in that position to a close. President Trump’s nominee, former Fed Governor Kevin Warsh, is widely expected to secure Senate confirmation and take over in time for the next FOMC gathering. However, Powell plans to continue serving as a member of the Board of Governors after relinquishing the Chair position. …Powell has said he will remain as a Governor as long as the Justice Department’s probe into the cost of the renovations to the Fed’s headquarters remains active.

The April meeting of the Fed’s monetary policy committee featured a lot of institutional news for a month in which the Fed kept monetary policy unchanged. The outlook for the economy and monetary policy remains unclear due to geopolitical turbulence and domestic policy uncertainty. This headline risk is delaying additional Fed monetary policy easing, likely until the end of 2026 or possibly into 2027. The Fed continued its current pause for rate reductions at the conclusion of the April meeting of the Federal Open Market Committee (FOMC), the central bank’s monetary policy decision making body. The FOMC held the short-term federal funds rate at a top rate of 3.75%, the level set in December of last year. This marked the third policy pause since the Fed resumed easing in September of 2025. The Fed’s statement of current economic conditions and policy stance was relatively unchanged from March to April.

WASHINGTON — U.S. consumer confidence unexpectedly edged higher in April amid a rally in share prices following a ceasefire in the war with Iran and improved perceptions of the labor market, helping ​to ease households’ financial worries for now. Despite the rise in confidence to a four-month high, the survey from the Conference Board on Tuesday showed higher gasoline prices ‌stemming from the conflict with Iran remained a source of concern for consumers. Fewer planned vacations over the next six months and the share of those intending to drive to their holiday destinations was the lowest since April 2020. …The Conference Board said its consumer confidence index climbed 0.6 point to 92.8 this month. Economists had forecast the index easing to ​89.0. It was in stark contrast with the University of Michigan’s Surveys of Consumers, which last week showed its Consumer Sentiment Index slumping to a record low in April.

WASHINGTON — US single-family homebuilding increased to a 13-month high in March, but the improvement was likely a blip as permits for future construction fell sharply and confidence among builders remained subdued. Single-family housing starts, ​which account for the bulk of homebuilding, surged 9.7% to a seasonally adjusted annual rate ‌of 1.032 million units, the highest level since February 2025, the Commerce Department’s Census Bureau said on Wednesday. Single-family housing starts increased to a pace of 941,000 units in February from 898,000 units in January. They rose 8.9% year-on-year in March. Permits ​for future construction of single-family homes decreased 3.8% last month to a rate of 895,000 units. ​They had increased to a pace of 930,000 units in February from 876,000 units ⁠in January. Single-family building permits dropped 7.9% year-on-year in March. …Overall housing ​starts vaulted 10.8% to ⁠a pace of 1.502 million units. They increased 10.8% year-on-year in March.

DALLAS — Kimberly-Clark reported first quarter 2026 results. Highlights include: Net sales of $4.2 billion increased 2.7 percent, as organic sales growth of 2.5 percent and favorable currency impacts of 2.0 percent were partially offset by a 1.8 percent decline from the exit of the company’s private label diaper business in the US. …First quarter operating profit was $753 million compared to $631 million in the prior year. Current quarter results included a $120 million benefit related to the settlement of insurance claims from a previous acquisition, and $99 million of charges related to the 2024 Transformation Initiative and Kenvue acquisition. 

In a letter signed by 76 representatives, the Real Estate Caucus and the Build America Caucus called on House Speaker Mike Johnson and Minority Leader Hakeem Jeffries to remove harmful provisions in the Senate-passed 21st Century ROAD to Housing Act that mandate the forced sale of single-family build-to-rent (BTR) housing.  The letter stated that Section 901 of the Senate bill, as drafted, “would have far reaching and unintended consequences that run counter to the bill’s stated goal of expanding housing opportunity.” The 76 lawmakers further warned that the Section 901 language would exacerbate the housing affordability crisis by severely curtailing the production of BTR housing nationwide. …NAHB estimates that single-family housing starts may drop by 40,000 units per year as a result of this mandate. Moreover, the Urban Institute says this provision targeting BTR owners could  “decrease the number of rental units built each year by at least 72,000.”

US population growth slowed notably in the latest Vintage 2025 population estimates from the U.S. Census Bureau, with the nation expanding by just 0.5% in 20251, roughly half the pace of the prior year. The deceleration was primarily driven by a sharp decline in net international migration (NIM), which dropped from 2.7 million to 1.3 million, while natural change remained relatively stable. Population gains remain concentrated in the South and parts of the West, while many areas in the Midwest and Northeast experienced slower growth or population declines. …At the county level, population growth slowed across much of the country. Among the nation’s 3,143 counties and the District of Columbia, the majority experienced decelerating population gains in 2025. …Population flows continue to shift away from the largest and most expensive counties toward smaller and less densely populated areas.

US softwood lumber demand moves more with residential construction than with GDP per capita or lumber prices when housing starts are included directly in the demand equation, a new USDA study finds. Using quarterly US data from 2000 to 2024, the study estimates a housing-starts elasticity of 0.593 for apparent softwood lumber consumption, compared with an income elasticity of 0.138 and a price elasticity of -0.212, then applies those elasticities in a forest-sector model to project outcomes through 2070 under five scenarios. …The authors incorporate housing starts into the Forest Resource Outlook Model by adding housing activity alongside GDP per capita growth and price changes in the model’s demand updating equation. …In the five scenarios, the model projects U.S. softwood lumber consumption declines by 2070, with the scenario 5 outcome the highest, the scenario 3 outcome the lowest, and scenarios 1, 2, and 4 in between. The study says the lowest case takes consumption to around 60 million m3 by 2070.

Economic uncertainty coupled with rising building material costs and interest rates resulted in a sharp decline in builder sentiment in April as the housing market enters into the heart of the spring buying season. Builder confidence in the market for newly built single-family homes fell four points to 34 in April. This is the lowest level since September 2025. Builder sentiment fell back in spring as buyers face ongoing elevated interest rates and growing economic uncertainty. The year started with hopes for housing momentum growth, but risks with respect to the Iran war, energy costs, and declines for consumer confidence have slowed the market. …All three of the major HMI indices posted losses in April. The HMI index gauging current sales conditions fell four points to 37 from March to April, the index measuring future sales dropped seven points to 42 and the index charting traffic of prospective buyers posted a three-point decline to 22.

Energy input prices increased in March at their fastest pace since June of 2020 as the conflict in Iran shocked critical global supply chains. Building material prices, excluding energy, rose for the eleventh straight month. Price growth for trade services slowed while transportation and warehousing price growth accelerated. The Producer Price Index for final demand increased 0.5% in March, after rising 0.5% in February. The index for final demand goods rose 1.6% over the month. The price index for inputs to new residential construction rose 1.2% in March and was up 3.8% from last year. The price of goods used in new residential construction was up 1.8% over the month and up 4.3% from last year, while the price of services was up 0.3% over the month and up 3.1% from last year. …Among input goods… the largest yearly declines in prices were for particleboard and fiberboard with prices down 15.7%… while softwood lumber prices were 7.8% lower.

Residential construction activity began 2026 on a mixed note, with single-family permitting weakening significantly while multifamily activity remained relatively stable. Higher borrowing costs and affordability constraints continue to weigh on single-family construction, while multifamily permitting shows signs of resilience despite regional variation. Over the first month of the year, the number of single-family permits issued nationwide reached 62,034. On a year-over-year basis, this represents a 15.2% decline compared with the January 2025 total of 73,115. Multifamily permitting activity was essentially flat, with 38,215 permits issued nationwide, marking a 0.5% decline from the same period last year. …The ten states issuing the highest number of single-family permits accounted for 63.8% of all single-family permits issued nationwide. Texas led the country, with 9,580 permits issued at the start of 2026, although this represented a 21.3% decline compared with January 2025. Florida, the second-highest state, saw permits fall by 14.9%, while North Carolina, ranked third, experienced a decline of 9.8%.