The Mortgage Economic Review is a Monthly Summary of        Key Economic Indicators, Data, and Events pertinent to    Mortgage, Housing, and Finance Professionals.

 Several Government Agencies that release Economic Data are still catching up on their data releases. Consequently, Economic Data is still incomplete and spotty. Due to the nature of data collection, some Economic Indicators for October 2025 will never be issued because the data was never collected.

 

AT A GLANCE – Key Economic Events and Data released during December 2025

• Interest Rates: The 10-year Treasury yield rose to 4.18% (Dec 31) from 4.02% (Nov 28).
• Housing: Existing Home Sales rose 0.5% (-1.0% YoY), New Home Sales data was unavailable, Home Prices are up about 1.3% to 1.7% YoY.
• Labor: The US Economy created 64,000 New Jobs during November. The Unemployment Rate rose to 4.6%, and Wages are growing at 3.5% YoY.
• Inflation: CPI for November rose 0.2% (+2.7% YoY), and PCE for September rose 0.3% (+2.8% YoY).
• The Economy: US GDP grew at a 4.3% annualized rate in 3Q2025, up 2.3% YoY.
• Consumers: Retail Sales was unchanged in October (+3.5% YoY), and Consumer Confidence fell in December.
• Stock Markets were mostly flat in December: the Dow rose 0.7%, the S&P was flat, and the Nasdaq fell 0.5%.
• Oil Prices fell to $57/Barrel (Dec 31) from $59/Barrel (Nov 28).

 

Interest Rates and Fed Watch

The Fed’s last FOMC Meeting of 2025 wrapped up on December 10th. As expected, the Fed cut the Fed Funds Rate by 0.25% to a target range of 3.5% to 3.75%. That is the lowest it’s been since September 2022. The Fed also signaled that it would pause additional Rate Cuts until late spring. The FOMC Committee is divided on how to proceed with Monetary Policy this spring. The “Hawks” believe Interest Rates should stay elevated to fight Inflation. The “Doves” believe Interest Rates should be lowered because the Labor Market is already deteriorating faster than desired. Specifically, the “Doves” are concerned Labor Data from the BLS is overstating Job Creation by 20,000 to 60,000 Jobs per month. Plus, Jerome Powell’s term as Fed Chairman ends May 15, 2026. So a lot will be  going on at the FOMC this spring. In practical terms, most Fed Watchers don’t expect any more Interest Rate cuts until June when a new Fed Chairman takes the reins. However, the Fed is always “data dependent,” so that can change depending on the Economic Data over the next few months. The next FOMC Meeting is January 27th and 28th. Fed Watchers don’t expect any Interest Rate changes from that meeting.

• 10-Year T-Note Yield rose to 4.18% (Dec 31) from 4.02% (Nov 28).
• 30-Year T-Bond Yield rose to 4.84% (Dec 31) from 4.67% (Nov 28).
• 30-Year Mortgage fell to 6.15% (Dec 31) from 6.23% (Nov 24).
• 15-Year Mortgage fell to 5.44% ( Dec 31) from 5.51% (Nov 24).

 

Housing Market Data Released during December 2025

We haven’t had a look at New Home Sales, Housing Starts, and Completions in a couple of months due to the Government Shutdown. Catch-up data is supposed to be released in January 2026. When the data is released, I doubt there will be any surprises. The Housing Market continues to trend sideways. Existing and Pending Home Sales eked out positive numbers.

• Existing Home Sales (closed deals in November) rose 0.5% to an annual rate of 4,130,000 homes (3,750,000 SFR + 380,000 Condos), down 1.0% in the last 12 months. The median Single Family Home price is $414,300, up 1.2% YoY. The Median Condo price is $358,600, up 0.1% YoY. Currently, there are 1,430,000 Homes for Sale, down from 1,520,000 in October, but up 7.5% YoY. Homes were on the market for an average of 36 days.
• Pending Home Sales Index (signed contracts in November) rose 3.3%, up 2.6% YoY.
• S&P/Case-Shiller 20 City Home Price Index rose 0.3% in October, up 1.3% YoY.
• FHFA Home Price Index rose 0.4% in October, and down 0.1% in September, up 1.7% YoY.
• The NAHB Index rose 2.6% to 39 in December from 38 in November, down 15.2% YoY.
• New Home Sales (signed contracts in November) – Delayed
• Building Permits (issued in November) – Delayed
• Housing Starts (excavation began in November) – Delayed
• Housing Completions (completed in November) – Delayed

 

Labor Market Economic Data Released during December 2025

Employment Data from the BLS was published in December after a long delay. The Data shows that the Economy added 64,000 New Jobs in November, but lost 105,000 jobs in October. That equals a net Job Loss of 41,000 for the 2 months. The Unemployment Rate increased to 4.6%. Much of the October job losses were due to 162,000 Federal Government employees accepting voluntary severance packages. The Labor Market continues to soften with the Unemployment Rate reaching 4.6%, its highest point since the end of the Pandemic.

The BLS is catching up on data releases delayed by the shutdown. The latest data is spotty and didn’t shed any new light on Labor Market conditions. Expect a foggy picture for a couple of months – a clearer picture may materialize in February or March. Until then, take Labor Data (or any Federal Agency Economic Data) with a grain of salt.

• The Economy created 64,000 New Jobs during November but lost 105,000 Jobs in October.
• The Unemployment Rate rose to 4.6% in November from 4.4% in September and 4.3% in August.
• The Labor Force Participation Rate rose to 62.5% in November from 62.4% in September.
• The Average Hourly Wage rose 0.1% in November and 0.4% in October, up 3.5% YoY.
• Job Openings rose to 7,670,000 in October from 7,658,000 in September and 7,227,000 in August, up 0.7%YoY. (In 2024, the average Job Openings was 7,800,000).

 

Inflation Economic Data Released during December 2025

We finally got some good news on the Inflation front. The CPI and PCE came in lower than expected, with Inflation dropping to 2.7% in the last 12 months. The latest CPI data covers a span of 2 to 3  months, from September through November. This is the lowest CPI since March 2021. In November, Energy prices rose 1.6%, with Gasoline rising 3.0%. Food prices were up 0.1% (+2.6% YoY). Eggs are down 13% YoY, but Meat is up 6.8% YoY. Shelter costs rose 0.1% (+3.0% YoY). Used Cars are up 3.6% YoY. Energy, Shelter, and Used Cars have been at the forefront of our price battles since the latest War on Inflation began in 2021.

• CPI rose 0.2% November, up 2.7% YoY    |  Core CPI rose 0.2%, up 2.6% YoY
• PPI data is delayed                                     |  Core PPI data is delayed
• PCE rose 0.3% in September, up 2.8 YoY |  Core PCE rose 0.2%, up 2.8% YoY

 

GDP Economic Data Released during December 2025

The 1st Estimate of 3rd Quarter GDP was published by the BEA (Bureau of Economic Analysis). Their data shows the US Economy grew at a 4.3% rate in 3Q2025, up 2.3% YoY.  That is way above Economists’ predictions. Plus, the BEA revised the 2nd Quarter GDP growth to 3.8% from 3.3%. It looks like the US Economy is on a tear. What’s driving the growth? Consumer Spending, Corporate Profits, Business Investment (think AI, deficit spending, low energy prices). The US Consumer continues to spend on almost everything, except cars – Vehicle Sales declined in the 3rd quarter.

 

Consumer Economic Data Released during December 2025

Retail Sales was flat in October. Why so Low? Car Sales pulled Total Retail Sales down. If you take out Vehicle Sales, Retail Sales rose 0.4% while Vehicle and Parts Sales fell 1.6% in October. Consumers are buying just about everything but vehicles. The Federal Tax Credit for Electric Vehicles expired. Combine that with high Car Prices and high Auto Loan Rates – Car Affordability took a big hit, so people stopped buying. The Consumer Confidence Index took another hit in December, falling to 89.1. Despite a gloomy attitude, US consumers continue to spend. That spending is the primary reason the US Economy is so resilient.

• Retail Sales was flat in October, up 3.5% YoY.
• Consumer Confidence Index fell 4.1% in December to 89.1 from a revised 92.9 in November and 95.5 in October.
• Consumer Sentiment rose 3.7% to 52.9 in December from 51.0 in November.

 

Energy, International, and Things You May Have Missed

• West Texas Intermediate Crude fell to $57/Barrel (Dec 31) from $59/Barrel (Nov 28).
• North Sea Brent Crude fell to $61/Barrel (Dec 31) from $62/Barrel (Nov 28).
• Gasoline (Wholesale Futures) fell to $1.71/Gal (Dec 31) from $1.82/Gal (Nov 28).
• Natural Gas fell to $3.71/MMBtu (Dec 31) from $4.85/MMBtu (Nov 28).

 

The Mortgage Economic Review is a concise summary of Key Economic Data that influences the Mortgage and Housing Markets. It’s a quick read that keeps busy Professionals updated on important Economic Information. Feel free to share this with colleagues in the Mortgage, Housing, Finance, and Banking business. To have the Mortgage Economic Review emailed to you each month, click here.

 

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This Economic Review is for informational and educational purposes only and should not be construed as investment, legal, financial, or mortgage advice. The information is gathered from sources believed to be credible and may be opinion-based and editorial in nature. Mortgage Elements Inc does not guarantee or warrant its accuracy or completeness, and there is no guarantee it is without errors. This newsletter is primarily intended for use by Housing and Finance Professionals, but it can be useful for anyone interested in Economics. This newsletter is not an advertisement to extend credit or solicit mortgage originations. © Copyright 2026 Mark Paoletti, Mortgage Elements Inc., All Rights Reserved.