The latest updates on home prices in the U.S. will come out this week, along with new and pending home sales for August. Federal Reserve Chair Jerome Powell will hold a town hall-style event with educators on Thursday, and on Friday, we’ll get the Personal Consumption Expenditures (PCE) Price Index, the Fed’s preferred inflation gauge. Costco, Micron Technology, Accenture, Nike, CarMax, and Carnival Cruise Line will be among the companies reporting earnings this week.

Update on Home Prices
We’ll get updates on home prices on Tuesday, with the Case-Shiller National Home Price Index and FHFA’s House Price Index for July. Prices as tracked by the Case-Shiller Index are projected to have risen 0.7% in July, which would mark the sixth straight month of gains following steep declines in the latter half of 2022. They’re projected to have fallen 1% on an annual basis, which would mark the fifth straight month of year-over-year declines.

The Fed’s interest rate hikes have pushed mortgage rates to the highest in over two decades, pricing many buyers out of the market. This combined with limited inventory has resulted in the most unaffordable market in almost 40 years, with roughly 80% of Americans saying now is a bad time to buy a home.

The Fed’s Preferred Inflation Gauge
On Friday, the Bureau of Economic Analysis (BEA) will issue the latest Personal Consumption Expenditures (PCE) Price Index—the Fed’s preferred inflation gauge—for August. Prices are projected to have risen 0.5% last month, up from July’s 0.2% gain. They likely climbed 3.5% on an annual basis, accelerating from 3.2% in July. Core prices, which exclude volatile food and energy costs, likely rose 0.2% from a month earlier and 3.9% year-over-year.

The PCE Price Index is the Fed’s preferred inflation gauge as it more closely tracks consumers’ actual spending decisions than the Consumer Price Index (CPI). The Fed targets a 2% annual rate of PCE inflation as part of its dual mandate of price stability and full employment.