Weekend Market Breakdown: What the Latest Jobs Data Means for Rates, Housing, and Buyers
Every week, we study the economic indicators that influence mortgage rates and homebuyer behavior. This week brought a combination of surprising job market weakness, steady improvement in housing activity, and a shift in expectations for interest rates as the year wraps up.
Here is what happened and why it matters for buyers, sellers, and homeowners.
A Weak Jobs Report That Changed the Rate Outlook
November’s private payroll data came in well below expectations. Instead of modest job growth, the latest ADP report showed:
A net loss of 32,000 private sector jobs
Small businesses losing 120,000 jobs
Sharp declines in professional services, IT, and manufacturing
Growth concentrated mostly in education and healthcare along with hospitality
Small firms make up almost half of all private employment in the United States. When they start cutting jobs, it is usually one of the earliest signs that business conditions are tightening.
What This Means for Rates
The Federal Reserve meets again on December 10. Based on recent trends and the weaker data, markets now expect:
A very strong chance of a rate cut
Continued easing in mortgage rates, which are approaching the high five to low six percent range
More potential momentum in buyer activity
If this pattern continues into early 2026, buyers could experience a very different affordability picture compared to the last two years.
Job Cuts Remain Higher Than Normal
The Challenger Job Cuts Report showed more than 1.17 million job cuts announced through November. This level has only been reached a few times since the early 1990s. In several of those years, the United States economy was already in a recession.
We are not in a recession today. However, the elevated cuts support the same message we see in small business hiring. The job market is cooling faster than expected.
Housing Activity Is Slowly Improving
There is also good news. Pending home sales rose 1.9 percent in October. Early indicators suggest that November existing home sales could reach their highest level since early 2025.
When mortgage rates stay closer to six percent, the housing market tends to respond with:
More buyer interest
More seller activity
Gradual improvement in affordability in certain markets
We are already seeing this reflected in our own client activity with more pre-approvals and more movement in purchase pipelines.
What Experts Expect for 2026
Forecasts for next year vary quite a bit.
Realtor.com Outlook
4.13 million existing home sales
Mortgage rates averaging 6.3 percent
Home prices rising about 2.2 percent
Inventory up by about 9 percent
Rents falling about 1 percent
National Association of Realtors Outlook
A projected 14 percent rise in existing home sales
Price growth near 4 percent
Our Take at The Mortgage Gurus
Mortgage rates remain the key variable. If rates fall below six percent and stay there, buyer activity could easily support more than 4.5 million existing home sales. Demand is already in place. Buyers simply need affordability to meet them halfway.
Rent Prices Continue to Ease
National rent data shows a one percent decline in November and rents now sit about five percent below their 2022 peak. Vacancy rates for multifamily units remain elevated because new apartments continue to be completed at a steady pace.
Lower rents help place downward pressure on inflation. Since shelter costs make up a large portion of both CPI and PCE inflation indexes, this trend supports the case for future rate cuts.
Bond Market Reaction and Rate Expectations
After several soft labor reports and more cautious comments from Federal Reserve officials, markets have shifted expectations quickly.
Here is where things stand today:
There is an 89 percent probability of a rate cut at the December 10 meeting
There is a 65 percent probability of another cut at the January meeting
Futures markets also show a smaller chance of back to back cuts at both meetings
The current Fed Funds Rate is in the 3.75 to 4.00 percent range. Futures pricing suggests that the market expects easier policy ahead.
What This Means for Buyers and Homeowners
With mortgage rates trending lower and the possibility of multiple cuts ahead, the next several months may offer strong opportunities for:
First time buyers
Homeowners thinking about moving
Borrowers who want to refinance out of high seven or low eight percent rates
Every buyer’s situation is unique. Our team is here to help you understand how changing rates affect your options and the best time to take your next step.
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