Home Purchase Applications Plummet as Mortgage Rates Hit Lowest Since September
Mortgage rates just slid to their most attractive level in over a year—so where are all the buyers?
The Rate Retreat vs. Buyer Reluctance
Numbers don't lie, but they can tell a confusing story. On one hand, borrowing costs for a home have dipped to a point not seen since September 2024. That's the kind of headline that should send a wave of applicants rushing to lenders. Instead, the data shows a stark pullback in home purchase applications. It's a classic case of the carrot being dangled, but the donkey deciding the field looks better.
A Market Waiting for the Other Shoe to Drop
This divergence screams consumer sentiment louder than any survey. Potential homeowners are clearly looking past the monthly payment and seeing something that gives them pause—be it economic uncertainty, sky-high asking prices, or the simple fear of catching a falling knife. They're treating the rate drop not as an invitation, but as a potential symptom. In the world of traditional finance, a 'correction' is just a polite term for 'we told you so.'
While mortgage brokers scratch their heads, the smart money is already elsewhere. This kind of dislocation in a foundational market is precisely why decentralized assets are building momentum. When trust in one system falters, capital finds a new home. The flow might have slowed for bricks and mortar, but it's just getting started for the digital foundations of the future.
Hiring came from services but manufacturing dropped again
December jobs data wasn’t thrilling, either. ADP says 41,000 private-sector jobs were added last month, a weak comeback from November’s 29,000 loss, a number that was actually revised up slightly from the earlier estimate of 32,000 lost. The new jobs didn’t meet the 48,000 forecast by Dow Jones, so once again, underperformance.
Nearly all the new jobs came from services. Education and health added 39,000, leisure and hospitality brought in 24,000, and trade, transportation, and utilities chipped in 11,000. Even financial services added 6,000.
That was the good part. Then came the losses: 29,000 jobs were cut from professional and business services, while information services shed 12,000. The goods-producing sector didn’t help either, with a total loss of 3,000, mostly because manufacturing jobs dropped by 5,000.
Firms with fewer than 500 workers carried the whole month.
Large employers barely showed up, adding just 2,000 jobs. Nela Richardson, chief economist at ADP, summed it up: “Small establishments recovered from November job losses with positive end-of-year hiring, even as large employers pulled back.”
Wages stayed flat while BLS prepares delayed data
Wages aren’t taking off either. People who kept their jobs saw their pay grow 4.4% from last year, same as November. Job switchers did a little better, getting an average boost of 6.6%, which is 0.3 percentage points higher than the previous month.
This ADP report lands right before the nonfarm payrolls data from the Bureau of Labor Statistics (BLS). That’s the one Wall Street actually watches. It’s supposed to be the first on-time release in a while after delays caused by the government shutdown.
According to economists surveyed by Dow Jones, the BLS report is expected to show 73,000 new jobs added in December, up from 64,000 in November. The unemployment rate is expected to tick down to 4.5%.
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