Redfin Economists’ Weekly Take: Mortgage Rates Tick Up After Strong Manufacturing Report, Key Jobs Data Delayed

This Week In A Nutshell: Rates have drifted slightly higher today after a surprisingly strong ISM (Institute for Supply Management) report suggesting more robust manufacturing activity. Whether rates hold steady depends on labor market data, which had been scheduled for this week, but is now delayed.

Upcoming Attractions

This was supposed to be a big week for economics data, with a slew of important labor market reports. Those reports ultimately determine if/when the Fed cuts interest rates, and how confident consumers feel about housing. But the Bureau of Labor Statistics has announced that they are delaying both Friday’s jobs report and tomorrow’s Job Openings and Labor Turnover report because of the partial government shutdown that began on Saturday, regardless of whether the government re-opens quickly.

• ISM manufacturing (Monday): This morning’s ISM manufacturing data came in with a surprisingly large 4.7 point jump to 52.6. The index is in expansionary territory (anything above 50) for the first time in a year, spurring a small jump in rates. New orders, production, and employment all increased. The comments in the report painted a different picture with respondents noting that tariff policies continue to weigh on their businesses.

Last Week’s Highlights

Last week was all about the Fed and had the potential for fireworks, but it all ended with hardly any change in rates. The Fed meeting on Wednesday proceeded as expected and provided little new information to markets. And Friday’s announcement of Kevin Warsh as the President’s nominee to lead the Fed after Chairman Powell’s term ends in May produced a muted reaction from markets as the choice was hardly surprising.  

Diving a Little Deeper

The U.S. Census released their 2025 population estimates last week. Their estimate for net immigration in the US fell to 1.3 million for the period between July 2024 and July 2025. This is compared to 2.7 million in 2024 and 2.3 million in 2023. However, if you go back farther, all of the years from 2010 to 2020 were actually lower than the latest 1.3 million estimate. But because the Census is only covering through July 2025, this estimate is not yet reflecting the full force of the change in immigration policy. The Congressional Budget Office (CBO) estimates net immigration of 408 thousand for the calendar year 2025, which would be lower than any year since 2010 except for the pandemic years. Such a large drop in immigration has significant implications for the economy as less labor supply means less job creation and slower economic growth.

Redfin Housing Market Reports

• Homebuyers Are Scoring the Biggest Discounts in 13 Years
  • The typical buyer who scored a home for below the list price in 2025 got a 7.9% discount—the largest since 2012.
  • 1 in 4 buyers who got discounts scored 10% or more off the list price—the highest share since 2012.
  • Nearly two-thirds of all homebuyers got discounts last year—the highest share since 2019.
• Homebuyers Are Canceling Deals at the Highest Rate on Record
  • Over 40,000 U.S. home-purchase agreements were canceled in December, equal to 16.3% of homes that went under contract that month—the highest December percentage in records dating back to 2017
  • Cancellations were highest in Atlanta (22.5%), Jacksonville (20.6%) and San Antonio (20.6%)
  • Cancellations were lowest in Nassau County (3.8%), San Francisco (4.2%) and San Jose (8.9%)
• More Gen Zers are Buying Homes. But It’s a Trickle, Not a Flood.
  • Homeownership for young Americans is a mixed bag. The homeownership rate for Gen Zers and millennials is ticking up, but both generations are tracking behind their parents.
  • The homeownership rate for younger generations inched up from 2024 to 2025 because affordability and inventory improved slightly. But it didn’t surge, because housing costs remained historically high, and many young buyers were turned off by economic uncertainty.
  • 20-somethings and 30-somethings both made up a bigger piece of the homebuying pie in 2025 than they did the year before.

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