Rates have risen sharply in the past few weeks, but the housing market has weathered this rise relatively well. Although the primary measures of mortgage demand show that homebuyers remain affected by higher rates, the gap between 2022 and 2023 levels has yet to widen noticeably. In addition, rates have begun to inch down slightly since the gathering of economists in Jackson Hole last week where the Federal Reserve Chairman seemed more cautious about raising rates at the upcoming FOMC meeting in September. Despite this optimistic news for financial markets, consumers remain a primary area of risk for the macroeconomy as delinquencies on various forms of debt have begun to rise, taking some steam out of our primary engine of growth thus far. While many have begun to celebrate the possible achievement of the proverbial ‘soft landing,’ the leading economic index suggests that we may not be out of the woods quite yet.
