No news is good news? For now, the adage is looking true, at least in the housing market.
The government shutdown has paused most major federal data releases, but some of the last data published before the shutdown, coupled with recent housing market data, all suggest a Goldilocks situation for housing: a job market that’s cooling enough to lower interest rates but not crashing, and inventory that’s higher but not headed for a glut.
It all points to favorable conditions for home sales to close out 2025.
Number to know: 3.2% hiring rate
The first number to know this week, from the Job Openings and Labor Turnover Survey: 3.2 percent. That was the hiring rate in August, meaning the share of the workforce that just got hired. It’s around the lowest hiring rate since 2010, when the economy was just beginning to dust itself off and climb out of the Great Recession.
It’s one half of a simple summary of the economy that labor economists have been using for a couple of years now: “Slow to hire, slow to fire.”
Number to know: 1.1% firing rate
Which brings me to the second number to know right now: 1.1 percent. That’s the rate of layoffs and discharges, or, broadly, the firing rate, to fit the rhyming scheme. It is not particularly high right now, even if it’s up slightly from the essentially record-low firing rate below 1 percent we saw briefly in 2022.
Putting it together, what “Slow to hire, slow to fire” means is that employers are essentially hunkering down, hanging on to their workers but not interested in growing those payrolls quickly.
For people with jobs, this means the economy feels essentially OK — not great, but OK.
But for those without a job, it’s proving unusually hard to break back into the workforce, which makes this a terrible time to be unemployed. And it’s gradually inflicting stress on the credit system and consumer spending. These are early signs of an economic slowdown, but not yet any indication of a recession.
Number to know: 1.1M active listings
Turning to the housing market: We’ve got a familiar refrain this month. More inventory means buyers have gained more negotiating leverage, though September likely represented the high-water mark for the year, with about 1.1 million active listings for the third month in a row. That’s 17 percent more than the same time last year.
Importantly, inventory growth has passed an inflection point: For the fourth month in a row, the pace of growth of inventory has fallen yet again. Growth has now been roughly cut in half, from the 32 percent annual growth seen in May.
That means inventory is not on a runaway growth track toward a glut that would push prices down. Rather, the market is recalibrating, as some sellers steer clear of a buyers’ market, or delist after not getting a satisfactory offer. For buyers, it means conditions have moved in their favor but they shouldn’t count on that trend intensifying much further.
Another helpful factor for buyers, though, is that borrowing costs have continued to fall. The 10-year treasury yield, which is a major benchmark that mortgage rates tend to track, plus about two points, has now dipped below 4 percent for the first time this year.
That reflects the combination of lower expected economic growth and the resulting lower Fed Funds Rates expected over the next few years, as the Fed reacts to try to prevent a recession.
Hand in hand with those lower Treasury yields, mortgage rates are moving back into their most favorable territory in 12 months, right around 6.25 percent. That represents significant savings compared to the rates of around 7 percent to start the year and is partly driven by investor expectations of interest rate cuts to come.
Because those expectations are already factored into the lower rates today, there’s no guarantee that mortgage rates will fall further even if and when the Fed continues cutting its overnight rate.
Jeff Tucker is the Principal Economist for Windermere Real Estate in Seattle, Washington. Connect with him on X or Facebook.
