As we head into the new year, the housing and economic landscape remains stable yet dynamic. For both clients making big moves and agents guiding them, understanding where we stand—and where we might be headed—can offer clarity and confidence. Here’s what to watch this month.

Economic Shifts: Signs of Slowdown, But No Sudden Stops

The U.S. economy is showing signs of gradual cooling. Job growth has slowed and the unemployment rate has risen to 4.6%, the highest level in over four years. Inflation continues to ease but remains above the Federal Reserve’s 2% target. While these indicators reflect a shift from the rapid growth of the past few years, they also suggest a more balanced, stable economy entering 2026.

Federal Reserve: One Rate Cut, Then a Wait-and-See Approach

The Federal Reserve recently announced a 25 basis point cut to its benchmark rate, bringing it to a range of 3.5%–3.75%. This marks the third rate cut of the year and reflects a cautious effort to ease financial conditions. Fed officials have indicated they plan to pause further cuts for now, signaling a more measured approach. It’s important to note that this rate affects short-term lending—not mortgage rates directly—but it helps shape broader financial conditions, consumer confidence, and investor sentiment.

Mortgage Rates: Steady Ground for Planning Ahead

Mortgage rates are holding steady, currently hovering near 6.2%. After years of sharp movement, this consistency offers a more stable foundation for planning. While rates haven’t changed significantly, the predictability allows for more confident budgeting—whether that’s locking in a rate, timing a sale, or preparing for a new purchase.

Buyer & Seller Impact: More Opportunity, But Confidence Varies

For buyers, rate stability has improved affordability modestly, especially when paired with flexible financing options like buydowns or rate locks. However, media noise around inflation and employment may still cause hesitation. Sellers are watching carefully too, pricing homes realistically and considering timing strategies as inventory remains tight in many markets.

Agent Insight: Support Smart, Steady Decisions

In a market defined by balance, agents play a critical role in keeping clients grounded. Buyers may need encouragement to act before competition returns, while sellers benefit from agents who set expectations around pricing and timelines. This is a time to lead with clarity, data, and a steady hand—especially as we enter a new year.