Two numbers defined the week of Sept. 28. Hiring nearly stopped, and mortgage rates went up anyway.
On Friday, Oct. 2, the Bureau of Labor Statistics reported that nonfarm payrolls rose by 29,000 in September, with the unemployment rate at 4.2%. Construction added 11,000 jobs, close to its 10,000-a-month average over the prior 12 months. The revisions were the harder part of the release: July was cut by 31,000 to a loss of 10,000, and August was cut by 29,000 to a gain of 133,000, leaving the two months 60,000 lower than previously reported. Our full account of the construction detail is here.
The day before, Freddie Mac’s weekly survey put the 30-year fixed-rate mortgage at 7.28% as of Oct. 1, up from 7.03% a week earlier. That is a 25-basis-point move in seven days and the sharpest weekly rise since 2022. A year ago the same survey read 6.34%.
Softening employment data and rising mortgage rates do not usually arrive together. When they do, the explanation is normally in the bond market rather than in housing, and borrowers feel the result regardless of the cause. For buyers, the practical change from the prior week is that a 30-year loan now costs about a quarter point more than it did seven days ago.
A heavy week for policy
Washington and the courts did more to the industry this week than the data did.
On Sept. 29, a federal judge in Manhattan preliminarily blocked enforcement of part of New York’s ban on algorithmic rent-setting. Judge Valerie E. Caproni granted RealPage an injunction against Section 3 of N.Y. General Business Law Β§ 340-B and denied the state attorney general’s motion to dismiss, according to the docket in RealPage, Inc. v. James. The order sets an initial pretrial conference for Oct. 30. The ruling is preliminary and does not strike the statute down, but a court finding that rent-pricing recommendations are protected commercial speech bears on every similar measure now being written.
On Sept. 30, Sen. Mike Lee introduced S. 5646, which would amend the Fair Labor Standards Act so that its definition of “employee” excludes qualified real estate agents and direct sellers. The practical effect would be to end case-by-case litigation over whether a brokerage’s agents are employees entitled to minimum wage and overtime.
The same day, the Federal Reserve Board finalized changes to its bank stress tests, including a rule requiring it to average the results of the two most recent annual supervisory stress tests when setting stress capital buffer requirements, beginning in 2028. Governors Michael Barr and Lisa Cook issued separate statements; Barr objected to the change. Capital rules are not a housing story on their face, but they set how much commercial real estate risk large banks can carry.
Earlier in the week, a judge also let agents’ antitrust suit against Zillow proceed on all five counts, keeping alive the biggest pending challenge to listing-portal practices.
Data centers again, and what they are pulling with them
The Census Bureau’s August construction spending report, released Oct. 1, showed data center building running 73% above a year earlier β the clearest single indicator of where construction capital is going. Amazon then committed $1 billion to communities that host its data centers and said it would stop requiring non-disclosure agreements from governments it negotiates with, a concession to the local opposition the buildout has generated.
Markets and the business
Manhattan’s third-quarter numbers, published Oct. 2 by Corcoran, showed 3,625 closings β up 9% and the most for a third quarter since 2022 β with active listings at the thinnest third-quarter supply since 2017 and the median price at a third-quarter record $1.250 million. It is a market tightening while much of the country loosens: nationally, price cuts reached 20.8% of listings in September.
Flipping, meanwhile, got harder. Gross margins narrowed to 21.5%, with several Texas metros near break-even.
On the corporate side, Hines named Adam Hines co-CEO alongside Laura Hines-Pierce effective Jan. 1, 2027, with Jeff Hines moving to chairman. LTC Properties bought nearly $160 million of senior housing and sold 20 triple-net properties for more than $260 million, continuing a shift from leases to operations. And Maryland ordered a modular housing push and set up a permitting acceleration team, the kind of supply-side intervention more states are reaching for.
What changed from the week before: the labor market is weaker than the record showed seven days ago, borrowing costs are a quarter point higher, and the legal foundation under algorithmic rent pricing is less settled than it was. The next scheduled Federal Open Market Committee meeting is Oct. 27-28.
