December 9, 2025 – Bad Timing

Economic Commentary

For the past several weeks we have been touting the fact that the Federal Reserve will have an avalanche of data to consider when they meet in December. Well, the December meeting starts today and certainly there is a whole bunch of data to consider.  However, the most important data indicating the direction of the economy right now is the jobs report. The report for September was mixed at best.  There was a more than expected increase of 114,000 jobs, but the gain was tempered by the revision downward of 33,000 jobs for the previous two months. Plus, the unemployment rate continued to inch upward, which is a concerning trend.

It would sure be nice for the Fed to review the October and November jobs data before they issue their decision. Unfortunately, the October report is not being released, and the November report is being delayed until next week. Not to say that other data is not important – especially the inflation report. However, inflation has been running higher than the Fed target of 2.0% and the October Consumer Price Index report is also not being issued. Higher inflation would make the Fed more reluctant to lower rates. What could override the inflation data? A weaker than expected jobs report.

So, might the Fed act in a conservative manner in the absence of jobs and inflation data? In other words, could they lower rates surmising that the job market is weak enough to offset any bad news on the inflation front. There are certainly plenty of other reports that could give the Fed a clue as to the direction of the employment sector.  For example, the ADP private payroll report and the Challenger report on layoffs.  None of these are an exact substitute for the jobs report but that is what the Fed will have to work with. By tomorrow we will have our answer. In the meantime, there is plenty of other data for them to chew on.  We expect the Fed will have some interesting discussions over the next day and a half.

Weekly Interest Rate Overview

The Markets. Mortgage rates eased a bit for the second straight week as the Fed meeting approached. According to the Freddie Mac weekly survey, 30-year fixed rates fell to 6.19% last week from 6.23% the previous week. In addition, 15-year loans decreased to 5.44%. A year ago, 30-year fixed rates averaged 6.69%, 0.50% higher than today. Attributed to Freddie Mac: “Mortgage rates decreased for the second straight week, emerging from the Thanksgiving holiday. Compared to this time last year, mortgage rates are half a percent lower, creating a more favorable environment for homebuyers and homeowners.”  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 real estate market may finally see a long-awaited surge in activity in 2026, with home sales poised for a potential double-digit jump. Lawrence Yun, chief economist at the National Association of REALTORS®, is forecasting a 14% nationwide increase with home sales for 2026, following 2025’s stagnating levels. New-home sales are also projected to rise 5% next year. “Next year is really the year that we will see a measurable increase in sales,” Yun told attendees at the Residential Economic Issues and Trends Forum during NAR NXT, The REALTOR® Experience, in Houston. Rising sales won’t come at the expense of price stability either: “Home prices nationwide are in no danger of declining,” he said. NAR expects prices to climb 4% in 2026, supported by job growth and persistent supply shortages.  The groundwork for a rebound may already be forming. Mortgage applications are trending higher, job gains remain steady, homebuilders continue to add supply, and the record-breaking 43-day government shutdown—that could have delayed some recent home sales—is finally over, Yun said. “Mortgage applications have been consistently above last year, implying that people’s desire to enter the market has been consistently positive,” Yun said. Yun expects gradual improvement in mortgage rates ahead. “As we go into next year, the mortgage rate will be a little bit better,” Yun said. “It’s not going to be a big decline, but it will be a modest decline that will improve affordability.” He forecasts rates to average around 6% in 2026, down from a roughly 6.7% overall average for this year. Source: NAR

In a tough rental market, rent concessions—those specials offered by landlords to attract potential renters—can be the difference between a vacancy and a signed lease. In other words, between you paying the monthly mortgage payment and your renter paying it. Now a new survey by Apartments.com has discovered which concessions renters want, so you’ll know the best concessions to offer to fill those vacancies quickly. Key Takeaways:

• “First Month Free” is the best: 36% of renters say this offer, more than any other rent concession, would make them more likely to sign a lease.
• Concessions equal renters: 67% of renters say a rent concession would moderately or significantly sway their choice between similarly priced apartments.
• Discounts over apartment details: 88% of renters say they’d consider overlooking minor flaws in an apartment for a good rent concession.
• All concessions are good concessions: That said, nearly one-third of renters value a rent concession that provides ongoing value throughout the term of their lease.
• Concessions equal inquiries: 95% of renters say a concession mentioned in a listing would make them more likely, or potentially more likely, to inquire about the property.

The best one? Thirty-six percent of respondents chose “free first month’s rent” as the concession that would get them to sign a lease. And renters are six times more likely to sign a lease when offered the first month’s rent free, compared to a smaller concession like a waived application fee. Source: Apartments.com

Experian recently released an analysis finding 47% of current renters believe they’ll be ready to purchase a home within the next four years. In addition, 67% think they’ll be ready in the next eight years. Forty-eight percent of Gen Z non-homeowners and 50% of millennial non-homeowners indicate they’ll be positioned to buy a home by 2029. Looking at the renter population more broadly in the firm’s State of U.S. Rental Housing Market Report, Baby Boomers make up 9.3% of renters, Gen X are 16.7%, older millennials are 17%, younger millennials are 21.3% and Gen Z are 34.3%. Just 1.3% of renters are members of the Silent Generation. Rent has been going up for all groups over the past few years. The average rent-to-income ratio–which measures how much of a renter’s monthly income goes toward rent–has increased to 46.8%, up 7.7 percentage points since February 2023. As of February 2025, the average renter income is $51,600, down 0.4% from 2024. At 62%, the majority of renters are in the low-to-moderate income category. Renters in that category spend 55.4% of their income on rent, compared with 33.4% for higher-income renters. Another notable metric–more than 50% of renters fall into the near prime and subprime credit segments. Sixty-one percent of renters say that financial support would be most helpful as they look to buy a home, followed by 51% citing a clearer understanding of what they can qualify for and 38% desiring more financial knowledge of the mortgage process.  Source: Experian