February 10, 2026 – The Shutdown Strikes Again

Economic Commentary

Last week we were supposed to witness the release of the first major release using 2026 data. Unfortunately, the short government shutdown has delayed the release of the January employment report. Hopefully the delayed report will be released this week (estimated Weds), and the shutdown does not bring into question the validity of the numbers as the jobs report relies upon surveys which cannot be replicated during a later date. Much like an individual’s credit report, these are moving numbers of which the employment report is taking a still photo. If you don’t snap the photo at the right time, the moment is gone. 

We did see the release of the ADP employment report which is an independent view of the private-sector labor market the payroll data of more than 26 million U.S. employees. The report showed the gain of 22,000 jobs in the private sector, short of even reduced expectations. However, while this report is an important indication of the overall employment sector, it frequently does not coincide with the trends witnessed within the government release.  Thus, we will have to be patient and hope we get a more complete picture this week. The ISM manufacturing index was released, and it showed an unexpected expansion of manufacturing activity in January, which was good news.  We also saw the release of the ISM services index, which came in on target with estimates.

We recently experienced another factor which could have affected the direction of interest rates and thus the momentum of the economy.  The market’s reaction to the controversy around Greenland demonstrated that there are always unforeseen factors which can arise during the year. Thankfully, this controversy was resolved, at least for now, and the markets calmed down.  But as we indicated, this only served to be a reminder regarding these unforeseen factors. Whether these factors are weather related, international conflicts or even political events, 2026 is just beginning and we always need to keep an eye out for the unexpected. In other words, expect the unexpected!

Weekly Interest Rate Overview

The Markets. Mortgage rates continued to be stable in the past week as the Fed pause had little influence on the markets.  With the delayed jobs report, the markets also had less data to chew on. According to the Freddie Mac weekly survey, 30-year fixed rates rose one tick to 6.11% last week from 6.10% the previous week. In addition, 15-year loans also increased slightly to 5.50%. A year ago, 30-year fixed rates averaged 6.89%, .78% higher than today. Attributed to Freddie Mac: “For the last several weeks, the 30-year fixed-rate mortgage has remained at its lowest level in years. The combination of improving affordability and availability of homes to purchase is a positive sign for buyers and sellers heading into the spring home sales season.”  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 senior housing sector has experienced a strong recovery from its pandemic challenges and has now returned to pre-pandemic levels. Vacancy rates have steadily decreased for 18 consecutive quarters, reaching 9.1% in the third quarter of 2025, the lowest level since 2018. This trend is primarily driven by increasing demand from America’s aging population, particularly baby boomers, alongside limited growth in inventory due to high interest rates and financing difficulties.  Annual inventory growth remains minimal at just 0.3%, benefiting existing operators as new construction struggles to keep up with demand. Over the last two years, rents in senior housing have risen faster than those in multifamily housing and the consumer price index (CPI), reflecting stronger demand and pressure from rising labor costs. Additionally, robust job growth in the health care sector highlights the demographic undercurrents driving the senior housing market as the baby boomer generation ages. Vacancy rates across four senior housing care types — including independent living, assisted living, memory care and skilled nursing — have consistently declined, with memory care experiencing the largest drop of 80 basis points in the third quarter of 2025. Rent growth remains robust, ranging from 3.6% to 3.8% year over year across subsectors, though signs of a slowdown in rent growth are emerging due to affordability challenges. Current average rents vary significantly, from an average of $3,940 in independent living to $10,706 in skilled nursing, reflecting the significance of labor costs in the sector. Despite recent improvements, five-year rent growth in senior housing is between 17.6% to 18.7% based on care type, trailing CPI growth for urban consumers of 24.8% and multifamily rent increases of 27.9%, as recent rent growth still hasn’t compensated for senior housing’s sluggish pandemic-era performance.  Source: Scotsman Guide

Vanguard recently released its Vanguard Retirement Outlook, reporting that 42% of Americans are currently on track to achieving retirement security. The comprehensive analysis uses the Vanguard Retirement Readiness Model* (VRRM), which builds on expertise garnered from Vanguard’s fifty-plus years serving individual investors.  The research evaluates retirement readiness of American workers and shows that access to employer-sponsored defined contribution (DC) plans remains a critical factor in retirement success. Workers with DC plan access are twice as likely to reach their savings goals compared to those without. If DC plan access were available to all workers, retirement readiness could increase by 19 percentage points. Working two years longer—until age 67—could add another 13 percentage points to readiness. “Expanding access to defined-contribution plans and improving plan design has dramatically improved retirement outcomes,” said Fiona Greig, Ph.D. Global Head of Investor Research and Policy, and co-author of the report. “Our research shows that features like autoenrollment and higher default saving rates are helping more Americans build retirement wealth.” Across all income levels, Gen Z and millennials are projected to be better prepared for retirement than baby boomers and Gen X, thanks to broader DC plan access and stronger plan design. About 47% of Gen Z and 42% of millennials are on track for retirement. However, debt burdens—especially student loans—remain a significant challenge for many. Millennials’ debt burden (25% of income) reduces their retirement success probability by 9 percentage points to 42%.  Among older generations, we find that nearly 40% of all baby boomers and Gen X workers are on track for retirement, with higher-income workers substantially better prepared. The median-income baby boomers will be able to replace 56% of their pre-retirement income, with an annual spending shortfall of $9,000, or 24% of their overall spending needs. For Generation X, the outcome improves with the spending shortfall reduced to $6,000 annually, accounting for 18% of their retirement spending needs. Source: Vanguard

Typical American retirees enter 2026 believing they need far more savings than they have, and many fear they would not be able to keep their homes as costs rise. A new Clever Real Estate survey of 1,000 retirees found they thought peers would need an average of $823,800 to retire comfortably this year, higher than their average savings of $288,700.  Retirees surveyed were blunt about the shortfall. Sixty-four percent said the United States is in a retirement crisis, while 41% believe retirement will be possible for the typical American in 25 years. Over a quarter of retirees (29%) also said they have no money saved for retirement at all.  Housing costs sat at the heart of that anxiety. The survey found 25% aren’t confident they’ll be able to afford their current housing costs a year from now, while 73% would do everything possible to stay in their home even if they could barely afford it. For many, the house has become the retirement plan. Nearly half of retirees (45%) go as far as saying they believe their home is the only thing allowing them to have a comfortable retirement. Yet 73% say they couldn’t afford to buy a home in today’s market.  Retirees’ concerns extended beyond their own balance sheets. The Clever poll reported that 54% of respondents aren’t confident Social Security will continue to provide full benefits for the rest of their lives. Moreover, 36% believe Social Security benefits will run out in their lifetime.  That contrasted with independent projections from the Social Security trustees, who estimated the combined trust fund reserves would be depleted in 2035, after which tax income alone could still cover roughly four-fifths of scheduled benefits.  Source: Mortgage Professional America