Inflation ticked up in what most economists saw as an indication that the impact of new tariff policies were beginning to show up in prices. There are wide disagreements - between analysts, investors, economists, high officials in government - as to what will occur with inflation in the 2nd half of 2025.
This analysis and data were compiled by our friend Patrick Carlisle at Compass.
The Fed continues to refuse to lower their benchmark rate despite enormous political pressure to do so. They cite the strong economy and the potential for inflation to increase. Expectations regarding the timing and size of future cuts fluctuate constantly.
In recent months, interest rates have been ticking up and down (and up) within a relatively narrow band of values: Below are conforming-loan and jumbo rate charts.
The Consumer Sentiment (Confidence) index ticked up slightly on July 18's release, but remains very low by long-term standards: "Consumer sentiment was little changed from June [and]…while sentiment reached its highest value in five months, it remains… well below its historical average… Consumers are unlikely to regain their confidence in the economy unless they feel assured that inflation is unlikely to worsen…At this time, [there is] little evidence that other policy developments, including the recent passage of the tax and spending bill, moved the needle much on consumer sentiment. Year-ahead inflation expectations fell for a second straight month, plunging from 5.0% last month to 4.4% this month…the lowest since February…[But indications are] that consumers still perceive substantial risk that inflation will increase in the future." University of Michigan Surveys of Consumers, Director Joanne Hsu, 7/18/25
Stock markets hit new all-time highs.
An overview of Bay Area County (and Sacramento) median house sales prices in Q2, and year-over-year appreciation rates.
Cities & towns with largest population gains through mid-July 2024: These gains in the last year measured were enormously impacted by immigration into the country, which is now, with changes in federal policy, apparently shifting into reverse. This may have significant ramifications for Bay Area markets, since Bay Area population and housing demand have been enormously affected by immigration. Of course, deportation efforts are focused on illegal immigrants - who don't play a huge role in our housing markets (beyond their impact on home construction), but anti-immigration and tariff policies may dramatically affect the immigration of those who have previously flocked here for high-paying high-tech jobs and opportunity, and who have played a big role in buyer demand.
The latest look at where housing construction is concentrated in the U.S.: Some of these regions - Florida and Texas are often mentioned - have reportedly seen a greater softening in their housing markets in 2025 due to an oversupply of new homes on the market. (There are other issues, such as insurance availability and costs, also at play in those regions, as well as in CA.)
