Home prices and labor market signal uncertainty

According to new data from the National Association of REALTORS®, the fourth quarter of 2025 saw home prices grow for 73% of U.S. metro areas, though the pace of growth slowed slightly from the previous quarter. While the median single-family home price rose 1.2% year-over-year nationally, there was notable regional variation. Prices continued to increase in the Midwest and Northeast, remained relatively flat in the South, and saw a moderate decline in the West.

Mortgage application volume declined 8.9% week-over-week in the final week of January, with purchase applications leading the decrease, according to the Mortgage Bankers Association. Weather disruptions from Winter Storm Fern likely contributed to lower activity, while refinancing also dipped slightly despite modest declines in mortgage rates, with the 30-year fixed rate averaging 6.21%. Nonetheless, when looking annually, refinance activity remains elevated, reflecting how borrowers respond to rate changes over time rather than weekly periods.

Fannie Mae shared that they provided approximately $74 billion in multifamily financing in 2025, marking a 34% increase from the previous year. Much of this activity supported affordable and workforce housing, with the former rising 31% year-over-year. Fannie Mae’s funding helped support rental housing supply through new construction, property preservation, and specialized financing programs designed to help projects reach or maintain occupancy. The results highlight continued investment in rental housing as the industry works to address long-term supply and affordability challenges.

A closely watched U.S. court case kicked off last week, examining whether major social media platforms can be held legally responsible for how their apps are designed. The lawsuit alleges that certain platform features are intentionally designed to encourage prolonged use among younger users, while the companies deny the claims and point instead to broader safety efforts and other contributing factors in users’ lives. This case is one of thousands of similar lawsuits and could influence how courts interpret long-standing legal protections for tech companies if a jury finds that platform design contributed to harm.

Over the last 2 weeks, several key labor reports have been released, leaving economists uncertain about the direction of the labor market.

The reports:

Initial jobless claims: In the final week of January, initial jobless claims rose to 231,000, up 22,000 week-over-week. This report exceeded expectations by a wide margin and, with the notable week-over-week increase, suggested that labor conditions could be softening

Job openings and labor turnover summary (JOLTS): Job openings in December also missed expectations significantly, falling to their lowest level since 2020.  At the end of the month, there were 6.5 million open jobs, nearly 750,000 less than projected and down 966,000 over the year. Despite the decline in openings, hiring activity remained relatively unchanged, highlighting that employers are being cautious about hiring

Employment report: The January employment report came in better than expected, showing that the economy added 130,000 nonfarm payroll jobs and that the unemployment rate was unchanged at 4.3%. The report reinforced near-term stability, even as other indicators hinted at cooling

Uncertainty is a common theme throughout markets right now, and the recent reports haven’t painted a clearer picture. Investors were briefly pushed toward Treasurys on the weaker-than-expected labor data, causing mortgage rates to fall slightly, but that was offset by the better-than-expected employment report.

The policy path of the Fed is unclear, particularly with a new Fed chair set to take over in May. As that transition approaches, market volatility is likely to persist. Interest rates may remain choppy, creating opportunities for those positioned to act quickly when they arise.

February 17: Texas Mortgage Roundup, Austin

February 24: California Mortgage Expo, Sacramento

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