NextFin news, The US Census Bureau reported on Wednesday, September 24, 2025, that new home sales in the United States unexpectedly rose by 20.5% month-on-month, reaching the highest level in three years. This increase exceeded analysts' forecasts and is partly attributed to a recent decline in long-term mortgage reference rates, which currently stand at approximately 6.26% for 30-year fixed loans, the lowest in the past 12 months.
New home sales represent about 10% of the overall US housing market. Despite the strong monthly gain, several real estate experts caution that this spike may be an outlier and expect sales to normalize in the coming months due to the volatility inherent in new single-family home sales data.
Meanwhile, Federal Reserve Chair Jerome Powell delivered remarks on the same day emphasizing a cautious approach to monetary policy amid a complex economic outlook. Powell highlighted a cooling labor market and persistent inflation risks, stating that the Federal Open Market Committee (FOMC) will proceed on a "meeting by meeting" basis without pre-committing to further interest rate cuts. He also noted that risk asset prices, including equities, remain at elevated levels but that the Fed currently does not see systemic financial stability risks.
Following Powell's comments, major US stock indices declined: the S&P 500 fell 0.28%, the Dow Jones Industrial Average dropped 0.37%, and the Nasdaq 100 decreased 0.31%. The US Dollar Index strengthened by approximately 0.66%, regaining ground as the Fed maintained a hawkish undertone despite a recent 25 basis point rate cut.
In addition to housing and monetary policy developments, US crude oil inventories unexpectedly declined by 0.607 million barrels, contrary to expectations of a build, supporting higher prices for Brent and WTI crude futures, which rose 1.23% and 2.49%, respectively. Geopolitical tensions also contributed to oil price gains, with reports of Ukrainian strikes on Russian oil extraction facilities in the Volgograd region.
Market participants are now awaiting the release of the Personal Consumption Expenditures (PCE) inflation data scheduled for Friday, September 26, 2025, which is expected to provide further guidance on the inflation trajectory and influence future Fed policy decisions.
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