February 17, 2026 – The Jobs Report – Finally

Economic Commentary

Last week’s “delayed” employment report contained the first major data of 2026. The growth of jobs was decidedly weak during the last quarter of 2025.  So, how did we do at the onset of the new year? In January the economy produced 130,000 jobs, which was more than expected.  The unemployment rate was reported at 4.3% down from 4.4% the previous month.  In addition, the previous two months of job gains/losses were revised downward by 17,000, putting the overall net at plus 113,000.  Generally, this report was seen as solid, which is significant after the weak finish of 2025. 

On the inflation front, wages grew 0.4% monthly and 3.7% annually.  This was slightly higher than expected, indicating inflation is still with us. The Federal Reserve does not meet again until March, thus there will be plenty of additional inflation data for them to assess over the next month when they consider what to do with regard to lowering interest rates.  Certainly, the fact that the jobs report was solid will be an important consideration contributing to this decision. The week finished out with a release of consumer inflation for January. The CPI was up 0.2% monthly and 2.4% year-over-year.  The core numbers excluding food and energy were up 0.3% monthly and 2.5% year-over-year. These numbers show an easing of the inflation rate.

It would be interesting to know whether the Federal Reserve’s Open Market Committee would have changed their opinion on the rate pause if they were able to review January’s jobs report and the January inflation data before they met.  There is an old saying – “hindsight is 20/20.” In this case we are pretty sure these numbers would not have changed their decision to hold rates steady. Between the government shutdown and the spike in producer prices in December, the picture probably still would not have been clear-cut.  Between the delay of January’s jobs report and the short month of February, the next employment numbers will be coming down the pike before we realize it.

Weekly Interest Rate Overview

The Markets. Mortgage rates fell slightly despite a better-than-expected jobs report. According to the Freddie Mac weekly survey, 30-year fixed rates fell to 6.09% last week from 6.11% the previous week. In addition, 15-year loans also decreased to 5.44%. A year ago, 30-year fixed rates averaged 6.87%, .78% higher than today. Attributed to Freddie Mac: “Bolstered by strong economic growth, a solid labor market and mortgage rates at three-year lows, housing affordability continues to measurably improve. These factors have caught the attention of many prospective homebuyers, driving purchase application activity higher than a 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

Early 2026 housing data is beginning to show a clearer shift in market momentum, with multiple indicators moving in the same direction. HousingWire’s recent Housing Market Tracker data points to improving demand, steadier pricing dynamics and inventory growth that supports a more functional housing market. As outlined in HousingWire’s weekly Housing Market Tracker by Logan Mohtashami, housing demand has historically strengthened as mortgage rates approach 6%. Early year data suggests that this relationship might be emerging again. Weekly pending home sales reached 56,252 for the week ending Jan. 23, posting gains both week over week and year over year. Pending sales typically translate into existing home sales data about 30 to 60 days later. Meanwhile, mortgage purchase application data also posted another positive week. Applications rose 5% week-over-week and were up 18% year-over-year.  Total active inventory reached 697,868 listings, up from 695,628 the prior week. During the same week last year, inventory rose from 632,076 to 635,529.  Based on HousingWire’s proprietary inventory and absorption data, the market is currently operating at approximately 2.6 months of supply. That level remains seller-favorable while reflecting a more balanced and functional market environment.  “My work over the years indicates that housing demand strengthens when rates approach 6%, though we have not seen a sustained period at this level recently. 2026 may be the first year this trend holds,” said Logan Mohtashami, lead analyst for HousingWire.  Source: HousingWire

Housing affordability improved year-over-year for the ninth consecutive month in November 2025, reaching its strongest level since the summer of 2022. While affordability is still more than 63 percent below its pre-pandemic, five-year average, the improvement trend has become increasingly clear—and increasingly durable. The forces that crushed affordability after the pandemic have meaningfully weakened. House price growth has fallen to near zero, mortgage rates are no longer climbing, and household incomes have continued to rise. Together, these shifts have powered the consistent improvement throughout 2025, especially more recently. In November, the labor market continued to provide critical support for housing affordability. Annual private-sector hourly wage growth increased 3.6 percent compared with a year earlier, boosting median household income by 3.5 percent year over year. Just that income growth alone increased house-buying power by roughly $13,100. Mortgage rates fueled another significant boost. Rates were 0.57 percentage points lower than a year earlier, lifting purchasing power by approximately $23,500. Combined, higher incomes and lower rates mean home buyers have about $36,600 more house-buying power compared with November 2024. At the same time, house price appreciation has nearly flatlined. Nominal house prices nationally barely moved, increasing just 0.5 percent annually in November, down from 3.6 percent one year earlier and marking the slowest pace since 2012. For the eighth consecutive month, income growth outpaced house price growth, steadily increasing affordability. The dynamics fueling the improving affordability are benefitting home buyers in markets across the country. Forty-seven of the 50 major metro areas we track posted year-over-year affordability gains in November, underscoring that the improvement is broad-based, rather than localized.  Source: First American

According to the latest edition of NAR’s Profile of Home Buyers and Sellers, today’s housing market is being shaped by older, more experienced buyers than ever before. The median age of repeat buyers has climbed to a record high of 62, a notable shift from the 1980s, when the typical first-time seller was in their mid-thirties. In fact, nearly half (49%) of all buyers in 2025 were over 60. As seasoned buyers take center stage, their housing decisions reflect clear, consistent priorities. Their choices are driven less by starting over and more by settling in for the long term; the data shows buyers 60+ are right-sizing their homes, favoring suburban and small-town locations, gravitating toward senior-related housing, and heading south.  Older buyers are overwhelmingly experienced participants in the housing market, with 93% having purchased a home after owning one previously. Their purchasing patterns also reflect a strong preference for less densely populated areas. One of the most commonly cited reasons that buyers over 60 purchase a new home is the desire to downsize. The relationship between age and home size is well established: sellers under 60 generally move into larger homes, while those over 60 tend to purchase smaller homes than the ones they sell. In 2025, sellers over 60 years old downsized by 100 square feet. According to NAR’s 2025 Profile of Home Buyers and Sellers, senior-related housing has remained consistently popular among older buyers, with 17% of buyers over the age of 60 purchasing a primary residential home in senior-related housing. Source: NAR