Affordability Improves for the Fifth Straight Month
Inside Lending – Week of December 1, 2025
QUOTE OF THE WEEK
“If you want a guarantee, buy a toaster.”—Clint Eastwood, American actor and film director
NATIONAL MARKET UPDATE
The National Association of Realtors reported the October Pending Home Sales index of signed contracts on existing homes rose almost 2% for the month, indicating a more buyer-friendly real estate market.
Home prices continued to rise at less than the rate of inflation in September. Case-Shiller national home prices were up just 1.3%, after a 1.4% gain in August, and the FHFA index of home prices rose just 0.2% in Q3.
The Mortgage Bankers Association reports homebuyer affordability improved in October for the fifth straight month, as the national median monthly mortgage payment decreased across multiple demographics.
REVIEW OF LAST WEEK
THANKFUL… A Thanksgiving-shortened week gave Wall Street traders much to be grateful for, as the three major stock indexes posted strong gains, fueled by elevated expectations of a Fed rate cut at the upcoming meeting.
The recently renewed rate cut hopes were driven primarily by remarks from Fed Governors and regional Fed Presidents indicating support for a December reduction—but not because of fears of a recession.
In fact, initial jobless claims fell to their lowest reading since April, well below levels that signal a recession. Plus, Retail Sales were up in September and Durable Goods Orders showed business spending is clearly not slowing.
The week ended with the Dow UP 3.2%, to 47,716; the S&P 500 UP 3.7%, to 6,849 and the Nasdaq UP 4.9%, to 23,366.
Bonds also moved up nicely overall, the 30-Year UMBS 5.0% UP 18 basis points, to 99.27. The national average 30-year fixed mortgage rate fell 3 basis points from the week before in Freddie Mac’s Primary Mortgage Market Survey. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information.
DID YOU KNOW… For 2026, conforming loan limits for mortgages backed by Fannie Mae and Freddie Mac will increase to $832,750 in most markets and $1,249,125 in high-cost areas.
THIS WEEK’S FORECAST
CONSTRUCTION SPENDING, MANUFACTURING, SERVICES, INFLATION… For September, Construction Spending is expected to hold steady overall, and we’ll keep an eye on the residential numbers. Economists forecast the November ISM Manufacturing Index will increase, but still indicate contraction, while the ISM Services Index will show that dominant sector of the economy expanding. Inflation should continue at a moderate pace as measured by September PCE Prices, the Fed’s favorite read.
FEDERAL RESERVE WATCH
Forecasting Federal Reserve policy changes in coming months. Although consensus has grown in the futures market for another rate cut next week, the rate is expected to stay there for the next two meets. Note: In the lower chart, the 85.4% probability of change means there’s only a 12.6% probability the rate will stay the same. Current rate is 3.75%-4.00%.
💡 No Excuse Pro Tip (Business Tip of the Week)
You can’t fix everything at once. You’ll just wind up either bouncing from one thing to another, or throwing things at the wall, hoping something will stick. Instead, decide on the things you need to do to move the needle this quarter, then focus on those priorities.
The market continues to shift in favor of buyers—lower payments, slower price growth, and strong inventory heading into 2026. If you want to understand how this impacts your buying, selling, or refinancing decision, let’s build your customized Mortgage Strategy Plan.
📲 Call or Text: 480-553-8770 📩 kevin@kevinbrierton.com 🔗 Schedule your Mortgage Strategy Call: www.KevinBrierton.com/Call NMLS 599873
