The past week brought a big shift in expectations for interest rates. On Thursday the odds of a December rate cut sat under forty percent. By Friday they jumped above seventy five percent. That change came from one short speech that sent the markets into a frenzy.

Below is a simple breakdown of what happened and what it means for the housing market as we move toward the end of the year.

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A Major Shift in Rate Cut Expectations

John Williams, the president of the New York Federal Reserve Bank, spoke at an event in Chile on Friday. He said interest rates may need “further adjustment in the near term.” When comments like this come from someone at his level, the market listens. It usually signals where the Federal Reserve is leaning.

This one sentence pushed expectations for a December rate cut much higher. Mortgage rates slipped as well, with the average thirty year fixed opening at 6.224 percent according to the Optimal Blue Mortgage Market Index.

We do not have much new data coming before the Fed meets on December ten. That means the press conference and policy statement will carry more weight than usual. The future of rates is being decided one meeting at a time.

From everyone at The Mortgage Gallery, we hope you enjoy a restful and reflective Thanksgiving. Here is the full snapshot of what the data shows.

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Jobs Report: Stronger Hiring but a Higher Unemployment Rate

September’s delayed Jobs Report showed stronger than expected job growth with 119,000 jobs added. Economists had expected around 50,000. That sounds positive, but revisions to July and August removed much of that strength. The unemployment rate also moved higher from 4.3 percent to 4.4 percent.

Because of the government shutdown, there will not be another full jobs report until mid December, which is after the Fed’s next meeting. That makes their job harder. They have already cut rates twice this fall. They are split on whether to do more without fresh labor data.

Weekly jobless claims are steady, but continuing claims remain above 1.9 million for the sixth month in a row. That shows people are taking longer to find new work. The job market is slowing but not collapsing.

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Home Sales: Two Straight Months of Improvement

Existing home sales rose again in October, up 1.2 percent from September and up 1.7 percent from last year. Inventory dipped slightly from September but is still eleven percent higher than last year.

These sales reflect closings from late summer before rates began to improve. Because rates have eased since then, we should see even better numbers in the months ahead.

NAR’s Lawrence Yun said lower rates are bringing buyers back despite recent uncertainty. Days on market also improved, and nearly one out of five homes sold above list price.

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Builder Confidence: A Slow but Positive Climb

Builder sentiment increased for the second month in a row. The index came in at 38 for November, the best reading since April.

While anything under fifty signals contraction, the trend is moving in the right direction. Buyer traffic improved, current sales held steady, and future sales expectations remain in expansion territory.

The NAHB expects modest growth in new single family construction next year as rates settle and demand continues to return.

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What to Watch This Week

Here are the key reports on deck:

• September inflation data
• September retail sales
• Case Shiller and FHFA home price data
• New Pending Home Sales numbers from NAR

These updates will give the market a little more clarity as we head into the Fed’s December meeting.

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Bottom Line for Real Estate Professionals

The economic data is mixed, but the housing market continues to show steady progress. Rates are stable. Buyer activity is improving. Builder confidence is inching higher. That creates more opportunity for anyone in the real estate space.

In a market like this, consistency and clear communication matter more than ever. If your clients have questions about rates, approvals, or timing, our team at The Mortgage Gallery is always here to help.