This has been one of the weakest ‘jobs week’ in several years, with multiple sources (ADP, JOLTs, Challenger) consistently pointing to a much weaker labor market. Fed rate cut probabilities are rising, and average mortgage rates remain in the low 6% range.

The Fed kept rates steady at their latest meeting, citing stubbornly high inflation and low unemployment. And Jerome Powell implied that rates might be on hold for a while. A new Fed Chairman should be announced soon (but he won’t assume the role until May). Meanwhile, more signs of improving buyer demand in the Case-Shiller home price numbers.

December and January are two of the slowest months of the year for home sales. But the spring selling season is around the corner (things really start perking up in March), and if mortgage rates can stay in the low 6% range, activity levels should surge.

There were many encouraging signs for the housing market this week: lower mortgage rates are boosting demand for new and existing homes, December CPI (inflation) came in lower than expected, and President Trump unveiled a number of (rough) plans to improve affordability.

With mortgage rates remaining in the low 6% range for several months now, transaction activity is clearly picking up. Is 2026 going to be the recovery year that we’ve been waiting for?

Jerome Powell often says that the Fed is “data dependent.” Well, the latest data clearly showed both a slowing job market and easing inflation rates. The December Fed rate cut now looks well-justified, but the market remains skeptical that the Fed will cut again on January 28.

The Fed cut short-term interest rates for the 3rd time in 2025, admitted that the BLS jobs numbers were probably “overstated,” and announced the resumption of short-term asset purchases — all good news for bond yields (and by extension, mortgage rates).

ADP’s November jobs data renewed concerns about the labor market (especially small businesses) and the economy as a whole. A rate cut on December 10 now seems likely, and average mortgage rates are approaching 6% again. Transaction volumes are starting to recover.

The government jobs data is starting to flow in, and it seems to be contradicting what we’ve been seeing from private sources like ADP. As a result, hopes are fading for a 3rd Fed rate cut on December 10.

The government has reopened, but it’s unclear how much official jobs and inflation data the Fed will get before its next meeting on December 10. While the government was closed, the private data on jobs (ADP, Challenger, UMich Consumer Confidence) was Halloween scary. Are Fed members paying attention? Or will they wait for official data before cutting rates again?

This was meant to be “jobs week” (JOLTs, ADP, BLS), but on account of the government shutdown, we only got ADP. On a nationwide basis, home prices are basically flat YoY, but that masks significant variation at the state and city level (half are down, half are up).

Despite being “in the dark” when it comes to new data, the Fed cut short-term interest rates for the second time this year and also announced the official end of QT — Quantitative Tightening. Mortgage rates remain near multi-year lows but can’t seem to crack into the fives.