Monthly Report: June 2025

United States 

Macro-wise, core inflation in the US came out lower than expected (0.1% vs. 0.3% expected month-on-month and 2.8% vs. 2.9% expected year-on-year). Inflation also came out lower (0.1% vs. 0.2% expected month-on-month and 2.4% vs. 2.5% expected year-on-year). The unemployment rate remained stable, while non-farm payrolls were lower but within expectations. On the other hand, retail sales were lower by 0.9% (compared to the expected -0.4%), while US GDP growth was also softer at -0.5% (compared to the expected -0.2%). Overall, the macroeconomic picture remains supportive in the US, with no major deterioration in the underlying data due to tariffs. At the same time, inflation continues to decline, providing the Fed with room to act soon. 

The housing market remains range-bound, as the persistently high mortgage rates don’t allow much growth. Every data print with high sales growth is reversed the next month, accompanied by deep contractions in both existing and new homes. Looking at industry contributions to GDP across states, however, the real estate and rental and leasing industry was the leading contributor to growth in all 50 states. 

Existing home sales rose by 0.8% month-over-month, to 4.03 million, rebounding from the 0.5% decrease in the previous month and beating expectations of 3.96 million units.

The median price of existing home sales has been rising steadily throughout 2025, reaching its highest level since early summer 2024. 

Sales of new homes collapsed by 13.7% from the previous month, wiping out the 9.6% increase in April. This reflects the sharpest decline since June of 2022. 

The median prices of new home sales have also been rising steadily since March, but they still haven’t broken through the range they have been establishing over the last 2.5 years. 

The total housing inventory in the US has been climbing steadily since November 2024, which is keeping a lid on prices and reflects the lack of growth in sales. 

Once again, mortgage rates remain persistently high as the base rate from the FED remains constant. However, both the 30-year and 15-year rates are lower by around 10 bps month-on-month, reversing fully the move from the previous month. 

Applications for Mortgages remain subdued in the US, reflecting the high borrowing costs. 

United Kingdom

Macro-wise, on the positive side, inflation kept ticking down at 3.4% vs 3.5% expected, and manufacturing PMIs were at 47.7 from the 46.6 forecasted. On the other hand, GDP growth came in lower than expected, at -0.3% vs. the 0% expected month-on-month. The unemployment rate was 0.1% higher than expected at 4.6%, and retail sales were down 2.7% month-on-month, compared to the -0.7% forecast.  

For housing, the Halifax House Price Index dropped by 0.4% month-on-month, which was expected to remain stable. On a year-on-year basis, the index is still up 2.5%, however, much lower than the 3.2% forecast. The impacts of the increased stamp duties are finally kicking in by the looks of it.  

The Residential Market Survey by RICS showed that the house price balance (the difference between respondents reporting price increases and declines) came out at -8% for April 2025, missing the forecasted -4%. This is the lowest reading in the last ten months. 

China 

China’s retail sales and industrial production continue to rebound, showing decent year-on-year growth, with latest prints of 6.4% and 5.8%, respectively. Both beat their expectations of 5.5% and 4.7% growth, respectively. The manufacturing sector remains in contraction, but has shown significant improvement recently, approaching readings of 50.  

China’s home prices continue to decline on a year-on-year basis and show improvement on a month-on-month basis. For May, new home prices dropped by 3.5% YoY, but up from the 4% decline shown in April. This marks the 23rd consecutive month of year-on-year declines but the 7th consecutive month of positive month-on-month growth.  

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References

(n.d.). US Treasuries Yield Curve. US Treasuries Yield Curve. https://www.ustreasuryyieldcurve.com/

(n.d.). CME FedWatch Tool. CME Group. https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html

(n.d.).Trading Economics. Trading Economics. https://tradingeconomics.com/united-states/nahb-housing-market-index

(n.d.).Goldman Sachs. Goldman Sachs. https://www.goldmansachs.com/

(n.d.).Bloomberg. Bloomberg. https://www.bloomberg.com

(n.d.). FRED. Federal Reserve Economic Data. https://fred.stlouisfed.org/

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