12/1/25 REcap: Thankful for Lower Rates

Our LendFriend Learning Center has now has over 200 articles to help homebuyers buy with confidence. Check out our top articles of the week at the bottom of this email.

Pending home sales rise

Pending home sales across the US finally showed a little life in October, rising 1.9% month-over-month, with the Midwest and South carrying most of the weight. The Northeast saw modest gains, while the West slipped again — no surprise given affordability pressures.

Year-over-year, contract activity across the US is still slightly negative, but the regional split tells the story: affordable markets are moving, expensive ones are not. We're seeing that here in Austin where pending home sales are up 5.8% year-over-year after the Austin market saw a dramatic price shift when mortgage rates were at multi-decade highs last year over the last few years. Lawrence Yun, chief economist for NAR, put it simply: as days on market stretch from now through February, buyers continue to gain leverage.

The report also noted that buyer and seller traffic expectations both ticked down, which lines up with what we’re seeing — a quieter market where motivated buyers are getting better deals.

September retail sales falter

Retail sales came in softer than expected for September (delayed due to the shutdown), rising just 0.2% instead of the 0.4% economists projected. It’s the first clean look we’ve had at consumer spending since the shutdown, and the message is pretty clear: households are still spending, but they’re pulling back. Big-box retailers like Target, Walmart, and Home Depot are saying the same thing: shoppers are prioritizing essentials and trimming discretionary purchases.

This slowdown is good for inflation and, by extension, good for the Fed’s path to more rate cuts. The next question is whether Black Friday and Cyber Monday show any rebound in demand, or whether consumers stay cautious heading into December. 

What is the Fed saying about a December Rate Cut?

We are now back at a near certainty of seeing a rate cut. Chances of a Fed rate cut jumped again from 79% to 88%.

There's a few data points and big speeches this week that could cement a rate cut next week. First, Powell is set to speak tonight at 8pm. Tomorrow, we'll get some jobs data from ADP and Friday, we'll get the personal consumer expenditure index report - the Fed's favorite inflation monitoring report. Fingers crossed for good news for mortgage rates!

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