By the Numbers

The Fed is unlikely to cut interest rates in January, but it might in March. A bigger unknown? How a DOJ probe will affect monetary decisions going forward.

After three rate cuts in 2025, the Fed seemed ready to take a wait-and-see approach in 2026 — a strategy expected to hold amid a low-hire, low-fire job market.

The year is off to a good start with steady mortgage rates, more inventory and flat price growth. What remains to be seen is whether buyer demand will return.

The share of home sales in Pacific Palisades and Altadena have jumped 50% or more, according to Realtor.com data — but prices have fallen sharply.

Though lower mortgage rates are improving affordability, economists warn that many potential homebuyers will still be “priced out” in the new year.

Nearly 20K homes worth about $46B were threatened in the Palisades and Eaton fires. As the number of vacant lots climbs, investors are starting to snap them up.

Inventory improved in 2025, but affordability challenges sidelined potential buyers, while unfavorable selling conditions discouraged homeowners from listing.

Last month, pending home sales rose 3.3% compared to October and 2.6% compared to November 2024, with the biggest year-over-year jump occurring in the South.

That’s an improvement from 2022, when the timeline was twice as long, but it still puts homeownership out of reach for many consumers as savings rates decline.

Mortgage rates fell again this week, making a 2026 home purchase slightly more affordable for buyers who already have an advantage over sellers.

Existing home sales dipped year-over-year but have increased for three consecutive months, suggesting a more balanced and stable market heading into 2026.

The November CPI report was based on incomplete data, “complicating interpretation.” Plus, mortgage applications, pending sales fall as buyers remain hesitant.

The U.S. lost 105,000 jobs in October but added 64,000 in November as unemployment hit the highest mark in over four years, according to the BLS.

High home prices and elevated mortgage rates are keeping first-time buyers locked out even amidst a rise in new home inventory, according to analyst John Burns.

Don’t expect any big shifts next year, but we should see a modest uptick in home sales and slightly lower mortgage rates — and no recession.

Concerns about inflation, the labor market and the health of the U.S. economy at large could push rates higher in the coming weeks and months, economists warn.

Research from Compass’ chief economist points to slow but steady improvement next year, especially if hiring picks up and “shadow inventory” is released.

A divided Fed worried about inflation and the softening jobs market cut short-term interest rates by 25 basis points on Dec. 10 — the third such cut this year.

Investors expect the central bank to cut short-term interest rates by 25 basis points — but the Fed’s economic projections could keep mortgage rates sticky.

Economists say the market “widely expects” another rate cut — but the central bank will be making its next decision without key jobs and inflation data.