Political Calculations' initial estimate of the total market capitalization of new homes sold in the United States ticked up again in June 2025. The first estimate of the time-shifted trailing twelve month average of the total value of new homes sold during the month is $29.37 billion.

This figure represents an increase of 3.1% from our revised estimate of $28.48 billion in new homes sales in May 2025. The May 2025 data was revised downward from the initial estimate of $28.86 billion we presented in the previous edition of this series.

The following charts present the U.S. new home market capitalization, the number of new home sales, and their sale prices as measured by their time-shifted, trailing twelve month averages from January 1976 through June 2025. The data through June 2025 indicates the new home market cap is rising mainly due to a rising trend in sale prices as the number of sales is trending downward.

New home sales in a falling trend:

Rising trend for home prices:

Reuters indicates the number of new homes for June 2025 was less that expected:

Sales of new U.S. single-family homes increased less than expected in June amid higher mortgage rates, pushing inventory to levels last seen in late 2007, which could keep homebuilding subdued.

New home sale units rose 0.6% to a seasonally adjusted annualized rate of 627,000 units last month, the Commerce Department's Census Bureau said on Thursday. The sales pace for May was unrevised at a rate of 623,000 units.

Economists polled by Reuters had forecast new home sales, which make up more than 10% of U.S. home sales, would rise to a rate of 650,000 units. New home sales, which are counted at the signing of a contract, are volatile on a month-to-month basis and subject to big revisions.

They fell 6.6% on a year-over-year basis in June. The average rate on the popular 30-year fixed-rate mortgage has hovered just under 7% this year after the Federal Reserve paused its interest rate cuts amid concerns that President Donald Trump's protectionist trade policy would stoke inflation.

Having mortgage rates hovering around the elevated 7% level has been a contributing factor to the ongoing sluggishness of the new home market. The prolonged new home affordability crisis is weighing on the business outlook for new homebuilders.

“Buyers are increasingly moving to the sidelines due to elevated mortgage rates and tariff and economic uncertainty,” said Buddy Hughes, NAHB chairman and a homebuilder from Lexington, North Carolina, in a release. “To help address affordability concerns and bring hesitant buyers off the fence, a growing number of builders are moving to cut prices.”

If there is a positive for new home affordability, it's that the number of unsold new homes is rising, with homebuilders increasingly taking steps to lower their prices as they attempt to increase sales. Through June 2025, those actions haven't yet been enough to change the recent uptrend in new home prices, but we'll see how well new homebuilders adapt with their changes in pricing strategy in the months ahead.

References

U.S. Census Bureau. New Residential Sales Historical Data. Houses Sold. [Excel Spreadsheet]. Accessed 24 July 2025. 

U.S. Census Bureau. New Residential Sales Historical Data. Median and Average Sale Price of Houses Sold. [Excel Spreadsheet]. Accessed 24 July 2025. 

Summer represents the low point in the seasonal demand for Campbell's Condensed Tomato Soup. In Summer 2025, it also presents a significant effort by The Campbell's Company (NYSE: CPB) to rein its costs to minimize the impact of new tariffs on steel.

In many ways, that's a re-run of what the company faced in 2018. Back then, we estimated the Trump administration's 25% tariff would add somewhere between $0.006 and $0.032 to the cost of each 10.75 fluid ounce can of condensed soup it sells. Which is not very much per can, but multiplied across hundreds of millions of cans sold per year, could have an impact on the company's bottom line.

Which is a point Campbell's then-CFO made while pointing out that small increase would shrink the company's net income (or profit) by roughly 5-6%.

Flash forward to 2025, and the tariffs on steel, which includes the tin-plate steel used to make Campbell's soup cans, have been set at 50%. Double the tariff, double the cost impact.

It wouldn't be surprising then to see one-time price increases related to 2025's steel tariffs taking effect. However our survey of prices and 10 major grocery-selling retailers shows as yet little in the way of price changes for Campbell's Condensed Tomato Soup, which so far have been muted. Here's the results for our survey for July 2025 and how prices changed from our previous snapshot in April.

• Walmart: $1.26/each, unchanged
• Amazon: $1.26/each, unchanged
• Kroger: $1.50/each, increase of $0.11 (+7.9%)
• Walgreens: $1.99/each, unchanged
• Target: $1.39/each, increase of $0.10 (+7.8%)
• CVS: $2.49/each, unchanged
• Albertsons: $1.69/each, unchanged
• Food Lion: $1.25/each, unchanged
• H-E-B: $1.31/each, unchanged
• Meijer: $1.29/each, unchanged

For these price increases, only Kroger's $0.11 increase to $1.50 per can counts as a true cost increase. While Target has a similar increase in this snapshot, its price of $1.39 per can is really going back to the same level it was in January 2025 after having had it on sale at a small discount in April 2025.

Here's our chart tracking the price per can of Campbell's condensed tomato soup from January 2000 through July 2025.

For its part, Campbell's current CFO Carrie Anderson is taking measures to avoid passing price increases through to consumers while also maintaining its low profit margins:

Campbell’s tariff mitigation plan also includes strategic inventory management, alternative sourcing, product cost optimization, and “where absolutely necessary, consideration of surgical pricing actions,” Anderson said. The company expects “the net incremental headwind of tariff-related costs to be up to $0.03 to $0.05 per share to fiscal ’25 adjusted EPS,” she added.

These projected tariff-related costs are spread across all of Campbell's products, which includes a lot more than just soup.

Finally, because tariffs are a heavy topic and because it is summer when soup sales are at their lowest, we'll leave you with something a little more light-hearted that explores an unexpected way to get more Campbell's condensed tomato soup onto your dining table:

There has to be a recipe out there somewhere that would make Campbell's Tomato Soup (Condensed) a better seller during the summer months.

Image credit: Advertising for Campbell's Tomato Soup from August 1925 Ladies Home Journal. Public domain image posted at EBay.

The U.S. stock market's upward momentum continued in the trading week ending 25 July 2025.

The biggest market-moving headlines of the week that was came on Wednesday, 23 July 2025 as the U.S. announced it had reached tariff deals with both Japan and Indonesia. The S&P 500 (Index: SPX) rose nearly 0.8% from the previous day's close, as the trade deal with Japan was lauded as a potential model for U.S. trade negotiations with the European Union.

The S&P 500 would go on to rise 1.5% on the week, clocking new highs along the way before closing at 6,388.64 on Friday, 25 July 2025. The latest update of the alternative futures chart indicates investors are currently focusing on 2026-Q1 as they set current day stock prices.

While the big trade deals gave the market its biggest upward push, the week's other market moving headlines, particularly related to China, cast shadows on the market's overall outlook. China's economy has been struggling with deflationary forces for some time, which have intensified in 2025. The past week's headlines indicate the measures so far taken by China's government to address them are not having the desired impact, prompting more top-down actions to combat the structural weakness within that nation's economy.

That affects the U.S. stock market because that weakness combined with the Chinese government's actions contribute to reduced demand for U.S. goods and services. That in turn puts limits on the growth prospects for U.S. companies and, by extension, their stock prices.

Here are the week's market-moving headlines, which capture several aspects of these dynamics.

Monday, 21 July 2025

• Signs and portents for the U.S. economy:
• Oil slips as little impact seen from EU sanctions on Russia
• US not rushing trade deals ahead of August deadline, will talk with China, Bessent says
• Fed minions hear they need to have their operations examined:
• US Treasury's Bessent says Federal Reserve needs to be examined as an institution
• Not-so-big stimulus developing in China as trade with U.S. picks up:
• China leaves benchmark lending rates unchanged, as expected
• China's exports of rare earth magnets to the US surge in June
• Exclusive: China quietly issues 2025 rare earth quotas, sources say
• Bigger trouble developing in the Eurozone:
• Europe's chemical industry seeks a lifeboat to stay in business
• EU to ramp up retaliation plans as US tariff deal prospects dim
• S&P 500 and Nasdaq notch record high closes, lifted by Alphabet
• Wall Street edged higher as tech earnings take center stage this week

Tuesday, 22 July 2025

• Signs and portents for the U.S. economy:
• Oil prices fall as tariff deadline looms
• High imports, soft summer demand weigh on US gasoline
• US considering removing tax on capital gains on home sales, Trump says
• Fed minions being primed to get new leadership, thinking about changing financial regulations:
• US Treasury chief: No need for Fed's Powell to step down right now
• Trump says Fed's Powell will be out in 8 months, calls him a 'numbskull'
• Bessent Calls For 'Fundamental Reset' Of Financial Regulations
• Bessent calls for deeper US bank regulatory reforms, scrapping dual capital requirements
• Fed's Bowman: Fed independence is very important with respect to monetary policy-CNBC
• Bigger stimulus developing in China:
• China embarks on world's largest hydropower dam, capital markets cheer
• Explainer: Why China's neighbours are worried about its new mega-dam project
• BOJ minions not sure on next step after political shakeup in Japan:
• How Japan's election outcome muddles the BOJ's policy path
• S&P 500 ekes out another record close Tuesday as traders react to latest earnings
• Wall Street closed mixed as investors weigh earnings and global trade developments

Wednesday, 23 July 2025

• Signs and portents for the U.S. economy:
• Trump strikes tariff deal with Japan, auto stocks surge
• US-Japan trade deal averts worst for global economy
• Japan, US agree to keep current 50% tariff on steel, aluminium, NHK reports
• US, EU trade talks bolstered by Trump's agreement with Japan
• US existing home sales fall more than expected in June
• Oil prices edge lower with trade talks in focus
• Fed minions thinking about who will lead Fed next as pressure for rate cut builds, also thinking about rewriting bank regulations:
• Trump again calls for Fed board to act, says Powell 'doesn't get it'
• Fed officials, banking experts discuss regulatory rewrite effort at conference
• BOJ minions see positives in US-Japan trade deal:
• BOJ sees trade deal as raising chance of meeting inflation goal
• Bigger trouble developing in the Eurozone:
• Chinese automakers gain ground in contracting European market, data shows
• China's yuan undervaluation fuels euro zone trade deficit, German study shows
• EU to advance retaliation on US goods as tariff hike looms
• S&P 500 and Nasdaq rally to record highs on optimism about trade deals
• Wall Street rises, Dow ends less than 4 points shy of record close
• Silver's hot streak gathers pace; market at highest since 2011

Thursday, 24 July 2025

• Signs and portents for the U.S. economy:
• US new home sales below expectations in June; housing supply rises
• Oil prices gain on US trade optimism, drop in crude inventories
• Chief Fed minion gives tour of Fed's $2.5 billion taxpayer-funded remodeling project to U.S. President:
• Trump presses Powell to cut rates during tense visit to Fed
• Actions to combat deflation developing in China:
• China releases draft law amendment to help curb price wars
• Markets bet Beijing is getting serious about China's overcapacity
• BOJ minions get reason to avoid hiking Japan's interest rates, for now:
• Japan's factory activity slips into contraction in July, PMI shows
• ECB minions pauses changes in Eurozone interest rates after year of cuts:
• ECB keeps rates steady as it awaits clarity over trade
• ECB rate decision as it happened: Rates helds at 2% amid trade uncertainty
• VIEW ECB leaves rates steady after a year of easing
• Euro zone business activity growth hits 11-month high in July, PMI shows
• European car sales slump in June as automakers' woes deepen
• German private sector growth remains tepid in July, PMI shows
• S&P 500 and Nasdaq notch record closes, lifted by Alphabet
• Wall Street ended mixed after Tesla and Alphabet earnings and rising yields

Friday, 25 July 2025

• Signs and portents for the U.S. economy:
• Oil steady as investors weigh trade optimism against potential Venezuelan supply increase
• Trump says US may not have a negotiated trade deal with Canada
• Trump says there is a 50-50 chance of trade deal with EU
• Chief Fed minion weighing next career step:
• Investors weigh market impact of possible early Powell exit
• Trump suggests Fed Chair may cut interest rates
• Bigger trouble developing as root causes of deflationary pressures outweigh efforts to regulate them in China:
• China’s Instant Retail Price War Intensifies Despite Regulatory Pressure
• Reform, not relief: China has more to worry about than just deflation
• China’s Premier tells EU leaders ‘we can’t afford’ massive industrial subsidies
• Could China Stop Exporting Deflation?
• BOJ minions still thinking about more rate hikes:
• Trade deal clears way for BOJ to tiptoe back to rate hikes
• ECB minions working to sell pause in rate cuts, bigger trouble developing in Eurozone:
• Euro zone economy holds up even as ECB speakers look to temper market view of no more cuts
• Euro zone companies warn of slowing economy, China competition, ECB poll shows
• The EU is no longer benefitting economically from its trade with China: Natixis
• Wall Street closed the week on a high note as the S&P 500 and Nasdaq set fresh records
• S&P 500, Nasdaq close at records; Deckers soars on UGG demand

The CME Group's FedWatch Tool forecasts the Fed will hold the Federal Funds Rate in its current target range of 4.25-4.50% until its 17 September (2025-Q3) meeting, when it is expected to cut the rate by a quarter percent. Beyond that date, the FedWatch tool anticipates additonal quarter point rate cuts at 12-week intervals on 10 December (2025-Q4), 18 March (2026-Q1), and 29 July (2026-Q3).

The Atlanta Fed's GDPNow tool projection of real GDP growth in the U.S. during the current quarter of 2025-Q2 held steady at +2.4% this week.

Image credit: Microsoft Copilot Designer. Prompt: "An editorial cartoon of a Wall Street bull who is excited by trade deals with Japan and Indonesia". Normally, when we prompt for a Wall Street bull, the AI will draw the bull wearing a suit. We can only imagine that it must be pretty hot in New York City while the bull is celebrating the S&P 500's new record highs!

Almost 25 years after the U.S. began deploying major parts of its national missile defense system, the technology of detecting and intercepting ballistic missiles has come a long way.

Earlier this year, President Trump unveiled the "Golden Dome" missile defense system, which builds on technological developments that greatly enhance the ability to both detect and intercept missiles launched against the U.S.

But inbound missiles aren't the only airborne threat Americans face.

We are of course referring to the mosquito, often considered to be the deadliest animal on Earth, if not also one of the most annoying.

That's why we were excited to learn via Core77 about Bzigo, a company that has taken major steps toward the detection of mosquitoes using technologies one might imagine has only been previously been used for defense against incoming missiles. Their 42-second video introduces their signature product, the Iris mosquito detection system:

While it is capable of tracking flying mosquitoes, it doesn't take them out, leaving that job to you as a vital part of your home's Golden Dome mosquito defense system.

You never saw the market crash coming. When it came, it lasted longer than you would ever have expected. The damage it did seriously dented your retirement savings at the worst possible time for you. Now, your ability to live through your retirement years the way you planned is in jeopardy. What can you do?

Working out how to deal with a worst case scenario like this is among the least fun aspects of financial planning because it casts a gloomy shadow over all that you might have hoped you could do in retirement. Yet if you don't and the worst case scenario for you happens, you'll find out quickly how much more gloomy the experience can be. Thinking about how you might recover from that kind of hit while planning your retirement will at least give you a good sense of what you can do if you need to face that situation. There's comfort in knowing what things you can do.

Previously, we considered a scenario in which the worst case happened, but the two hypothetical investors experiencing it at different points of their retirement years never adapted their retirement spending plans to recover from it.

But what if they did? The analysts at Schwab's Center for Financial Research considered how two different hypothetical investors who started off with the same retirement plan might respond to the worst case scenario of a prolonged market crash at the beginning of their retirement years by changing the rate at which they withdrew money from their retirement accounts while the market recovered. One would withdraw just 2% of their retirement savings per year, while the other would withdraw 4% [1]. The following chart shows the results of this exercise:

Here's what they found:

A rebounding market should help them quickly make up lost ground, right? Unfortunately, not always—those continuing withdrawals can create a strong headwind, with more shares sold to support spending in a down market than would be the case when values are appreciating. But by dialing back his annual withdrawals to 2%, Investor 1 will be back where he started after roughly 11.5 consecutive years of 6% annual gains. With a 4% withdrawal rate, Investor 2 would have to have 28 straight years of 6% gains to fully recover.

Somewhat lost in this discussion is the bigger question of what are each investor's retirement savings for. Is it to preserve and grow the total value of their accumulated retirement savings throughout their entire retirement so that it can be passed on to their heirs? Or is it to provide reasonably sufficient funds to support their living expenses during retirement?

For example, let's say you went from having a million dollars in retirement savings when you started your retirement and dropped to around $650,000 after two years of a market crash. Withdrawing 2% annually could get your retirement account to fully recover after 11.5 years, but would mean pulling just $13,000 to support your retirement in that first year of recovery and similar amounts in future years. You could double that withdrawal rate to 4% and you can have $26,000 in that year, but that would mean an extra 16.5 years before your retirement account might reach $1 million again.

Which outcome matters more for you?

Previously on Political Calculations

• When Is the Worst Time for Your Retirement Savings to Take a Hit?
• What Can You Do If Your Retirement Savings Take a Big Hit?
• Will Your S&P 500 Investment Last In Retirement?
• Cashing Out of the S&P 500
• Can You Afford to Retire?
• How Much Do You Need to Save for Retirement?

Notes

[1] Here is Schwab's hypothetical investing scenario for the two investors recovering from a bit hit to their retirement savings:

The example is hypothetical and provided for illustrative purposes only. It is not intended to represent a specific investment product. Dividends and interest are assumed to have been reinvested, and the example does not reflect the effects of taxes or fees. Both portfolios start with $1,000,000. Both portfolios experience 15% declines in years one and two, while both hypothetical investors also withdraw $50,000 per year. Starting in year three, both portfolios grow 6% per year. Investor 1 withdraws 2% per year. Investor 2 withdraws 4% per year.

Image credit: Recovery Chalkboard by Nick Youngson. Creative Commons CC BY-SA 3.0 at Picpedia.org.