O
ctober’s labor market saw a 105,000‑job decline, while November added 64,000, leaving the unemployment rate at 4.6 %—the highest since September 2021. The Bureau of Labor Statistics’ December release, issued on Dec. 16, paints a picture of a “low‑fire, low‑hire” economy, with federal job cuts and a shutdown contributing to October’s losses.

    The data had a modest effect on mortgage rates: the 30‑year fixed fell to 6.27 % after the report. The Federal Reserve, having cut short‑term rates three times this year, is now adopting a wait‑and‑see stance. Although the current jobs figures hint at the possibility of further cuts in early 2026, the December report will carry more weight in shaping policy.

    Housing experts see the market entering 2025 amid a tug‑of‑war between labor and mortgage conditions. Lower rates in 2026 could spur home buying, but job‑security concerns may temper demand. Affordability remains a top concern; wage growth slowed to 0.1 % in November and rose only 3.5 % year‑over‑year—still above home‑price growth but insufficient for significant affordability gains.

    Residential construction lagged: the National Association of Home Builders reports a net loss of 42,200 construction jobs over the past year, with five of the last six months showing declines. Builder sentiment rose slightly in December but remains low; the Housing Market Index sits at 39, below the breakeven 50 level since April 2024. Builders are cautiously optimistic about future sales, yet face persistent supply‑side pressures from high regulatory costs, material prices, and rising inventory that intensify competition for new homes.