Mortgage rates increased one basis point last week according to the Freddie Mac Primary Mortgage Market Survey released on January 8th. In the first full week of the new year, mortgage rates remained within a narrow range, hovering close to the 6% mark. The combination of solid economic growth and lower rates has led to improving momentum in for-sale residential demand, with purchase applications up over 20% from a year ago.
Mortgage applications decreased 9.7 percent from two weeks earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending January 2, 2026. “Mortgage rates started the New Year with a decline to the lowest level since September 2024. Refinance applications were up 7 percent for the week but were at a slower pace than in the weeks leading up to the holidays,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “FHA refinance applications saw a 19 percent increase, although that was a partial rebound from a drop the week before. MBA continues to expect mortgage rates to stay around current levels, with spells of refinance opportunities in the weeks when rates move lower.” Added Kan, “Purchase applications were 10 percent higher than the same week a year ago but were down over the week following decreases in conventional and FHA applications.
U.S. manufacturing activity slumped to a 14-month low in December, with new orders contracting further and input costs grinding higher as the sector continued to bear the imprint of President Donald Trump’s import tariffs. The Institute for Supply Management said its manufacturing PMI dropped to 47.9 in the final month of 2025, the lowest level since October 2024, from 48.2 in November. A reading below 50 indicates contraction in manufacturing, which accounts for 10.1% of the economy. The ISM survey on Monday suggested a recovery was unlikely in the near-term, but economists were hopeful of a turnaround this year as Trump’s tax cuts took effect. “While a less fluid trade environment and somewhat more favorable business tax environment are positives for activity, we remain cautious on the extent of recovery in traditional cap-ex categories this year,” said Shannon Grein, an economist at Wells Fargo.
Finding a job continued to be a slog at the end of the year as new data shows US businesses sought out fewer workers in November and hiring rates wilted even further. The number of estimated job openings, a closely watched indicator of labor demand, fell to its lowest level in more than a year, slumping to 7.15 million at the end of November from 7.45 million the month before, according to the latest Job Openings and Labor Turnover Survey data from the Bureau of Labor Statistics. Except for retail and construction, job openings trended lower across most industries. Hiring activity trended in a similar direction. There were an estimated 5.12 million new hires in November, a drop-off from 5.37 million the month before. But Wednesday’s report showed that fewer employees were laid off in November and there was an uptick in workers quitting their jobs, an important indicator of worker confidence. However, despite the monthly swings, the longstanding trend is clear; it remains a low-hire, low-fire labor market where the all-important turnover activity continues to grind slower.
