Staying informed in a shifting market is essential. Each week, we provide a 30,000-foot view of mortgage rate movement and the economic data shaping housing and lending conditions. Here’s what stood out over the past week—and what to watch next.
Mortgage Rate Movement
30-Year Fixed Rate (0 points):
Since Monday, January 5th, market rates are 0.125% lower week over week, continuing a modest downward trend.
Market Summary
December’s economic data reinforces a clear theme: the U.S. labor market is cooling. Job growth missed expectations, revisions painted a weaker picture beneath the surface, and hiring momentum continues to slow. At the same time, housing construction fell to pandemic-era lows, highlighting persistent supply constraints that could reintroduce price pressure if demand strengthens as rates ease.
Key Takeaways from Last Week
December Jobs Report (BLS)
Payrolls increased by 50,000, falling short of expectations. While the unemployment rate edged down to 4.4%, downward revisions to prior months point to underlying labor market softness.
Job Growth Concentration
Employment gains were largely confined to health care, leisure, and hospitality. Excluding these sectors, overall job growth would have been negative—underscoring broader weakness.
Private Payrolls (ADP)
Private-sector employment rose by 41,000 in December, led by medium-sized businesses. While positive, the increase missed forecasts and reflects a slowing hiring trend.
Decelerating Hiring Momentum
The 12-month average of private job gains sits near 51,000 per month, compared to just 20,000 per month over the past three months, signaling a meaningful slowdown.
Wage Trends
Job switchers continue to see stronger wage growth (6.6% year over year) compared to job stayers (4.4%), though the gap has narrowed as hiring cools.
Broader Labor Market Signals
Rising continuing jobless claims, declining job openings, low quit rates, and subdued hiring rates all point to what economists describe as a “low-fire, low-hire” labor market environment.
Layoffs and Hiring Plans
While December job cut announcements remained low, total layoffs for 2025 ranked among the highest on record. Meanwhile, hiring announcements fell to a multi-decade low, reinforcing caution among employers.
Housing Starts
Housing starts declined 4.6%, reaching pandemic-era lows. Building permits also fell, highlighting constrained housing supply—an important factor that could support home prices if demand improves alongside lower mortgage rates.
Looking Ahead
The middle of the week brings a heavy slate of economic data:
- Tuesday: Consumer inflation data and new home sales
- Wednesday: Wholesale inflation, existing home sales, and retail sales
- Thursday: Weekly jobless claims
These reports will help clarify whether the cooling trends continue—and how they may influence mortgage rates and housing demand in the weeks ahead.
As always, our team is standing by to help navigate changing market conditions.
Cheers,
Drew & Team
