Pending home sales fall, but brokers should watch these cities

Two closely watched economic indicators were released this week: new payroll data and the Consumer Price Index (CPI), often referred to as core inflation. Together, they offer a snapshot of where the U.S. economy stands heading into the end of the year.

Payroll data, drawn from a mix of October and November, showed that the labor market is cooling, but not yet in trouble. Most industries saw little to no net change in employment. Health care and social assistance were the only two sectors to show any kind of substantial job creation gains in this time. Economists have pointed toward reduced immigration as a key reason for the decrease in overall job creation this year.

Meanwhile, CPI came in at 2.6%, well below the 3% rate forecasted by economists. A miss of this size would typically raise concerns, but this report came with important caveats. October’s government shutdown disrupted the Bureau of Labor Statistics’ (BLS) ability to collect pricing data until November 12. As such, the BLS relied on proxy data to estimate month-over-month inflation changes. Federal Reserve Chair Jerome Powell referenced these data limitations in his most recent press conference, noting they would be taken into account when determining future interest rate policy.

Pending home sales posted their biggest decline in nearly a year, with house hunters holding off amid high housing costs and concerns about job security. Redfin also published reports on the most affordable cities in the U.S. to buy a home and flood-risk data in Washington state as the area experiences historic flooding.

And just for fun: Aspen, Colorado, dominated the most expensive home sales of November.

Recently, both Fannie Mae and Freddie Mac have added billions of dollars’ worth of mortgage-backed securities (MBS) to their balance sheets. While the reason why is up for debate, many believe that this is an effort to increase profitability as well as keep rates at a reasonable level. After nearly 20 years off the public market, this could be further evidence of the mortgage titans gearing up for a potential public offering.

Over the past 5 months through October 2025, their retained portfolios have seen more than a 25% bump. Combined, these holdings now total up to $234 billion, the highest seen since 2021. Analysts expect this growth to continue into 2026, with projections suggesting an additional $100 billion could be added next year alone. Even with this expansion, the two entities still have over $200 billion of room before reaching the regulatory cap on their retained portfolios.

With the recent increase in MBS spending, investors may need to adjust their risk calculations. Having two large players reduces the number of securities reaching the open market. This has drawn attention because of what happened with these companies in 2008, when their balance sheets peaked at $1.5 trillion. The collapse of the housing market caused extreme portfolio losses, leading both to return to government conservatorship. Since then, additional regulations and safeguards have been implemented. As we move into 2026, this remains an important area to watch ahead of a potential public offering.