Week Of: December 1st, 2025

11-21-25 10:49am With the end of the shutdown, the flow of key government economic data has gradually resumed, beginning with the delayed Employment report for September. This labor market data was mixed, and the reaction was slightly positive for mortgage markets. As a result, rates ended the week a little lower.

The Employment report revealed that the economy added 119,000 jobs in September, above the consensus forecast of 50,000. Strength was seen in health care, leisure/hospitality, and social assistance. However, the unemployment rate unexpectedly increased from 4.3% to 4.4%, the highest level since October 2021. Average hourly earnings were 3.8% higher than a year ago, up from an annual rate of 3.7% last month.

Of note, the release date for the next Employment report is scheduled for December 16, after the Fed meeting on December 10. Recent comments from Fed officials about future monetary policy have varied greatly, and investors remain nearly evenly split about whether the Fed will reduce the federal funds rate by another 25 basis points at this meeting.

In October, sales of existing homes rose slightly from September, close to expectations, to the highest level in eight months. Sales were 2% higher than a year ago. The median price of $415,200 was up a slim 2% from last year at this time. Inventories remain stuck at low levels, standing at just a 4.4-month supply nationally, below the roughly 6-month supply typical in a balanced market. However, inventories were 11% higher than a year ago. First-time buyers represented 32% of sales, up from 27% a year ago.

The latest survey of home builder sentiment on housing market conditions from the NAHB unexpectedly rose from 37 to 38, the highest level since April. However, the index remained in negative territory below 50 for the nineteenth straight month. According to the NAHB, 41% of builders reported cutting prices as an incentive to attract buyers, the highest level since the pandemic. Builders said that uncertainty about tariffs and rising costs made it more difficult to price their homes.

Looking ahead, investors will continue to watch for additional information about tariffs and monitor comments from Fed officials for hints about monetary policy later in the year. With the end of the shutdown, investors will be waiting for updates to the schedule for the release of government economic reports. The September Producer Price Index (PPI), a monthly inflation indicator, is scheduled for Tuesday. New Home Sales is scheduled for Wednesday. MBS markets will be closed on Thursday and will close early on Friday.

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