December 23, 2025 – Happy Holidays

Economic Commentary

‘Tis the season to be jolly.  And certainly, the retail industry is hoping that the consumer is feeling quite jolly as the holiday season and the year come to a close.  It is estimated that close to 20% of all retail sales happen during this time and anything short of that would be an economic disappointment – not to mention the disappointment of lighter stockings hanging on mantels. This holiday season comes with an air of economic uncertainty, especially considering the government shut down which ended just before the holiday season got underway.

One of the results of the shutdown was the absence of the October jobs report and a delayed November report. The November report is typically issued on the first Friday of December, but instead it was issued last Tuesday, December 16th.  Every month, the jobs report contains some of the most significant data released by the government.  Many would consider it the most important monthly report.  This particular report carried even more significance in light of the fact that the October report was not released, in addition to the fact that we had releases showing private payroll data as extremely weak.

So, how did the numbers look?  In November, the economy added 64,000 jobs. In October, the economy lost 105,000 jobs reflecting the bulk of government layoffs. August and September’s numbers were revised downward by 33,000 jobs. The unemployment rate rose to 4.6% from 4.4% as reported in September – the highest reading since September 2021. In addition, wages rose 0.1% month-over-month and 3.5% annually, both lower than expected. Subject to revision, at this point the economy has added approximately 575,000 jobs year-to-date, compared to approximately 1.5 million jobs added in 2024 after downward revisions. This points to a much slower employment market. Let’s hope that the slower growth in jobs did not put a damper on the holiday sales.

Weekly Interest Rate Overview

The Markets. Mortgage rates were stable in the past week, despite the weak unemployment report and tame inflation news. According to the Freddie Mac weekly survey, 30-year fixed rates fell one tick to 6.21% last week from 6.22% the previous week. In addition, 15-year loans decreased to 5.47%. A year ago, 30-year fixed rates averaged 6.72%, 0.51% higher than today. Attributed to Freddie Mac: “The average 30-year fixed-rate mortgage has remained within a narrow 10-basis point range over the last two months. With rates down half a percent over last year, purchase applications are 10% above the same time one year ago.” 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

Single-family home values are determined by numerous factors, including location and the neighborhood in which they’re built. But a home’s physical features are among the most influential on home buyers. The latest study from the American Housing Survey (AHS) revealed just how much influence key physical details on a home have — giving builders a peek inside the minds of their clients:

• Home Size. Obviously, the size of the home plays a large role in determining how much it’s worth, especially as more buyers are using their homes as not only a living space but a working one, too. Homes that are between 1,000 and 2,000 square feet are valued about 17% higher than those under 1,000 square feet. Homes between 2,000-3,000 square feet saw around a 30% increase in value, and the largest homes of 3,000 square feet or more skyrocketed to 55% more in value.
• Bathrooms. The number of bathrooms in a home are extremely important in today’s market; the AHS survey shows they impact home value even more than bedrooms. Each full bathroom increases home value by approximately 32% compared to just 5% for an additional bedroom. A half-bathroom adds an estimated 15% value.
• Age of Home. Buyers are placing a lot of stock in newer homes, likely because of their improvements in energy efficiency and insulation as well as their more modern building systems. Homes built between 2010 and 2019 have 13% higher value than those built prior to 2010. The newest homes built after 2020 are valued 19% higher.
• Garages, Fireplaces and Centralized Air Conditioning. Garages and fireplaces each add around 10% value to a home. Garages are crucial because they add protected parking spaces but can also serve as additional hobby space. Fireplaces are not only an aesthetic plus but, in some areas, can reduce heating costs.
• Centralized air conditioning (AC) also adds about 7% value to homes across the country but has greater impacts on parts of the U.S. that are influenced by extreme weather and expensive cooling costs. Source: National Association of Home Builders

The median rent in the U.S. fell for the 27th month in a row in October 2025, according to a new Realtor.com study. The median asking rent for 0–2-bedroom units in the 50 major metro areas was $1,696, $9 less than the previous month—representing a 1.7% decrease in rent from the previous year. In October, the rental market was experiencing a seasonal slowdown, as seen by the third straight month-over-month fall. With the median asking rent down 0.1% year-to-date compared to a 1.1% increase during the same period in 2024, 2025 has been a softer year overall. Rent declines have been moderate overall, though. The median rent in the U.S. was just $63 (-3.6%) lower than the August 2022 peak, which occurred three years prior. It is noteworthy that it was still $245 (16.9%) higher than it was at the same time in 2019 (prior to the pandemic). However, this increase is not as great as the 49.8% increase in the median price-per-square-foot of for-sale home listings in the six years ending October 2025, and it is somewhat lower than the increase in overall consumer prices (up 26.1% in the six years ending September 2025). Put simply, despite shelter inflation and nominal rents both continuing to grow, the real asking rents have dropped in the last six years.  Rent composition has changed in numerous markets over the last six years due to rising rents and flexible and remote employment arrangements. Twenty of the top 50 metro areas are now more driven by out-of-market demand than by local renters.  Source: Realtor.com