December 2, 2025 – The Scoreboard

Economic Commentary

The government shutdown caused a major back-up of government data, and we are in the midst of seeing the spigot of data being released. This is very timely because the Federal Reserve is scheduled to meet one week from today and, unlike their last meeting, they are likely to have some, but not all the data they need in order to make a decision regarding cutting rates one more time in 2025.  Not all the back-up of releases may be issued by the time of the meeting and some of the releases are expected to be incomplete and even others not released at all.

For example, on November 20th we saw the release of the jobs data for September. That release indicated that the economy produced 114,000 jobs in September, higher than expected, but still slower than 2024’s data. The unemployment rate rose one tick to 4.4%, which is the highest in almost four years. Wage inflation was slightly elevated. The October report is not going to be released,  and November’s report is expected to be delayed until mid-December. In addition, the October Consumer Price Index (CPI) release is also being cancelled because of incomplete survey data.

 Jobs and inflation are certainly headline reports, but there is an avalanche of additional data which has started to flow. Of major importance is the estimate of economic growth for the third quarter. The original estimate was due October 30th and the third, or final estimate was to be released in mid-December. Now the initial estimate is to be released in late December. There are also measures of retail sales, sales of new homes, factory orders, orders for durable goods and more. It will take some time to make sense of the multitude of releases as the government catches up, but the Fed will not have the luxury of time to analyze the data. It would not be surprising if the uncertainty of this scattered release schedule translates into increased volatility within the markets as 2025 comes to a close. In other words, hang onto your seat belt!

Weekly Interest Rate Overview

The Markets. Mortgage rates eased a bit in the past week as data started flowing again. According to the Freddie Mac weekly survey, 30-year fixed rates fell to 6.23% last week from 6.26% the previous week. In addition, 15-year loans decreased to 5.51%. A year ago, 30-year fixed rates averaged 6.81%, 0.58% higher than today. Attributed to Freddie Mac: “Heading into the Thanksgiving holiday, mortgage rates decreased. With pending home sales at the highest level since last November, homebuyer activity continues to show resilience nearing year end.” Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

Real Estate News

The U.S. Federal Housing Agency (FHFA)  announced the conforming loan limit values (CLLs) for mortgages Fannie Mae and Freddie Mac (the Enterprises) will acquire in 2026.  In most of the United States, the 2026 CLL value for one-unit properties will be $832,750, an increase of $26,250 from 2025. The Housing and Economic Recovery Act (HERA) requires FHFA to adjust the Enterprises’ baseline CLL value each year to reflect the change in the average U.S. home price.  Earlier today, FHFA published its third quarter 2025 FHFA House Price Index® (FHFA HPI) report, which includes statistics for the increase in the average U.S. home value over the last four quarters.  According to the nominal, seasonally adjusted, expanded-data FHFA HPI, house prices increased 3.26 percent, on average, between the third quarters of 2024 and 2025.  Therefore, the baseline CLL in 2026 will increase by the same percentage. For areas in which 115 percent of the local median home value exceeds the baseline conforming loan limit value, the applicable loan limit will be higher than the baseline loan limit. HERA establishes the high-cost area limit in those areas as a multiple of the area median home value, while setting the ceiling at 150 percent of the baseline limit.  Median home values generally increased in high-cost areas in 2025, which increased their CLL values.  The new ceiling loan limit for one-unit properties will be $1,249,125, which is 150 percent of $832,750.   Special statutory provisions establish different loan limits for Alaska, Hawaii, Guam, and the U.S. Virgin Islands.  In these areas, the baseline loan limit and the ceiling loan limit for one-unit properties will be $1,249,125 and $1,873,675, respectively. Due to rising home values, the CLL values will be higher in all but 32 U.S. counties or county equivalents.

Aspiring homeowners in the U.S. — including 84% of Gen Zers — are delaying major life decisions until they can afford to buy a home. That’s especially significant given the median age of first-time buyers is now 40 years old, a record high.  Overall, 71% of Americans seeking homeownership are avoiding big moves like marriage, having children and making career shifts until they can make it to the closing table, according to Coldwell Banker Affiliates’ American Dream Report released recently.  Out of about 3,000 adults surveyed, more than half said homeownership defines the American Dream, outranking having children, starting a career or retiring by age 67. Nearly 1 in 5 aspiring homeowners said they are putting off marriage or children to make that dream a reality. A smaller portion, 17%, said the same of changing jobs or having a pet, and 15% are delaying entrepreneurship.  “People view housing not only as a foundation for personal and financial stability, but also as one of the most effective vehicles for building long-term wealth,” Jason Waugh, president of Coldwell Banker Affiliates, said in a press release.  “However, when people delay major life events in pursuit of homeownership, it inevitably shapes patterns in household formation and consumer behavior.” This wouldn’t be as troubling 45 years ago, when Americans could generally afford a home by their late 20s. But the median age of today’s first-time buyer has climbed to 40, according to the National Association of Realtors’ 2025 Profile of Home Buyers and Sellers report.  “Delayed or denied homeownership until age 40 — instead of 30 — can mean losing roughly $150,000 in equity on a typical starter home,” NAR Vice President Shannon McGahn said in that report.  Despite affordability challenges and competition from cash buyers, many younger Americans are determined to buy for the first time. Based on the report, 72% of millennials and 70% of Gen Zers hope to buy a home in the next five years.  Source: Real Estate News

The First American Data & Analytics’ Real House Price Index (RHPI) shows that housing affordability has inched higher for six straight months, offering a glimmer of relief after several years of surging costs. Slower home price growth, rising household incomes, and moderating mortgage rates have all contributed to the improvement. Still, affordability remains well below historical norms, and many potential buyers are torn between staying renters or taking the leap into ownership.  Experts note that even with current challenges, the long-term wealth benefits of owning a home remain powerful. “Affordability should continue to improve, allowing more households to unlock the ‘homeownership’ door and start the equity-building journey that turns a house into a wealth-generating asset,” the report states.  The data backs this up. Homeowners who purchased at nearly any point in the past 20 years have seen meaningful equity gains. For example, buyers who purchased during the 2006 housing boom still built about $181,000 in home equity, despite the market downturn that followed. Those who bought a decade ago have gained roughly $227,000, while buyers who entered just before the pandemic have earned about $168,000 in equity. Even homeowners who bought in 2022, after interest rates surged, have already accumulated around $66,000 in value.  These figures highlight how ownership can pay off over time, even when housing cycles turn volatile. While renting offers flexibility and fewer responsibilities, it builds no long-term wealth. Over the same periods studied, renters paid hundreds of thousands of dollars in rent, which is money that didn’t translate into any financial return.  Source: MP Daily