The week of Nov. 2-6 was supposed to be about the midterm elections. For housing, it became a week about interest rates. Voters approved billions of dollars of housing money and pushed back hard on data centers. But the economic data that followed, ending with a stronger-than-expected jobs report on Friday, kept a December rate hike on the table and kept financing costs near their highest levels in about three years.
A jobs surprise keeps the Fed in play
The Bureau of Labor Statistics said employers added 165,000 jobs in October, well above the 48,000 average of the prior 12 months. August and September were revised up by a combined 84,000, and unemployment edged down to 4.1%. For housing the details were less encouraging. Construction lost 3,000 jobs, and residential building and specialty trades together shed about 16,400, while nonresidential contractors kept hiring.
That matters because the Federal Reserve held its target range at 3.75% to 4% on Oct. 28, with Governor Lisa Cook and Cleveland Fed President Beth Hammack dissenting in favor of another hike, after a quarter-point increase in September. Its next decision is Dec. 8-9. On our reading, a strong labor market gives the officials pushing for a hike more support.
Mortgage rates ease, but buyers stay away
Rates gave a little ground before the jobs report. Freddie Mac’s 30-year average fell to 7.18% on Nov. 5, its third straight weekly decline from a peak of 7.40% on Oct. 8 and Oct. 15. A year ago the rate was 6.22%.
Demand has not come back. Realtor.com’s October report showed contract signings down 17% from a year earlier, the lowest October in its records, while active listings rose 7.4% to more than 1.18 million and the median list price fell for a 12th straight month, to $415,000. The Federal Reserve’s October senior loan officer survey found banks tightening standards on every category of commercial real estate loan and reporting weaker demand for every kind of residential mortgage.
The National Association of Realtors’ annual buyer profile showed who is still buying. First-time buyers made up 22% of purchases, up from a record-low 21%, but their median age stayed at 40, and a record 10% paid all cash. Of those cash buyers, 28% drew on an inheritance.
What voters did
The Nov. 3 ballots produced the week’s biggest policy changes. California voters approved an $11.25 billion housing bond and a state loan program that can cover up to 17% of a new home’s price, but rejected a measure to streamline environmental review. Florida voters passed Amendment 3 with about 62%, raising the non-school homestead exemption to $250,000 by 2028. Florida’s Revenue Estimating Conference put the recurring revenue loss at about $11.8 billion a year.
Locally, voters backed data center limits in at least 37 of 41 ballot measures and defeated all 13 measures that would have eased the way for new sites. For data center developers, local ballots have become a new kind of siting risk. On Thursday, Treasury and the IRS named 6,576 Opportunity Zones for the program’s next decade, about a quarter fewer than in 2018.
Earnings: housing companies feel the slowdown
Third-quarter results from housing companies showed the same slow market. Zillow posted a $158 million loss, which included a $165 million securities settlement, and said residential revenue fell 4% on higher-than-expected mortgage rates. Opendoor more than quadrupled its home purchases but its loss widened to $218 million. Real REMAX said it is planning for as much as 10% fewer home sales in 2027. Compass reported record third-quarter results, but CEO Robert Reffkin said the market “has softened over the past few weeks.”
Rate pressure also showed up in commercial lending. Starwood Property Trust swung to a $389.7 million loss after a $336.6 million credit provision it tied to higher projected rates on its floating-rate loans. Retail landlords had a better quarter: Simon Property Group raised its 2026 guidance again.
What changed from the week before is the direction of the risks. The election added housing funding in California and property-tax relief in Florida, but it also put new obstacles in front of data center development. The data then strengthened the case for a Fed that stays tight. Next week brings October inflation figures and NAR’s existing-home sales report, which will show whether October’s rate spike reached closed sales.
