From the Desk - Economic Commentary
Scott Hofer, Member Strategies Manager - 6/24/2026
U.S. stocks opened modestly higher to mixed this morning as markets attempt to recover from a sharp, tech-driven selloff earlier in the week. Early trading showed the S&P 500 up roughly 0.3–0.4%, the Nasdaq up about 0.6%, and the Dow only slightly positive. The primary driver of the bounce was buying in beaten down technology and semiconductor stocks, as investors stepped back into names that had been heavily sold amid concerns about stretched valuations and AI spending. Broader macro factors also helped support the open, including falling oil prices and slightly lower Treasury yields easing pressure on equities.
In economic releases this morning, the May residential construction report indicated building permits showed modest softening, with permits running at a 1.41 million annualized pace, down 0.7% from April and roughly flat year-over-year; single family permits edged slightly higher, but overall activity remains restrained by weakness in multifamily construction and affordability pressures. Meanwhile, broader construction activity weakened more sharply, as housing starts fell significantly, highlighting continued caution among builders amid high mortgage rates and softer demand.
Also, the new home sales release for May showed sales declined to a 580,000 annualized pace, down 7.3% from April and 6.8% from a year ago, indicating demand has cooled. Inventory rose to 496,000 homes for sale, pushing months’ supply up to 10.3 months, a relatively elevated level that reflects slower absorption. Overall, the combined housing data points to a housing market losing momentum, with weaker sales, elevated inventory, and only limited support from permitting activity.
Rounding out today’s economic releases, mortgage applications increased modestly in the latest MBA weekly release for the week ending June 19, 2026, with the mortgage applications rising 1.0% on a seasonally adjusted basis, though unadjusted volume declined due to a Juneteenth holiday adjustment. Overall activity was driven by a 3% increase in refinance applications, while purchase applications slipped 1% week over week, reflecting still soft homebuying demand. Mortgage rates were largely stable, with the 30-year fixed rate edging down slightly to about 6.59%, helping support refinance activity but not enough to spur purchase growth.
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