Opportunity in Housing
The latest Fannie Mae & Pulsenomics Home Price Expectations Survey—which compiles views from roughly 150 of the top economists in the country—just dropped for Q4, and the takeaway for housing is clear: the long-term opportunity remains compelling.
Yes, today’s rate environment gets most of the attention. But rates don’t tell the full story—and that’s where the opportunity lives. When you help clients zoom out, the math becomes hard to ignore.
According to the survey, the median forecast calls for 2.4% home price appreciation over the next year and just over 20% cumulative appreciation over the next five years. Put simply, time in the market still matters.
On a $500,000 purchase made at the start of the year, that translates to roughly $12,000 in equity gained in year one and about $100,000 over five years. That’s meaningful wealth creation—and it’s a conversation worth having with every prospective buyer who’s on the fence.
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Fed Speakers
With the Fed meeting now behind us, several policymakers have been out sharing their views, including the two recent dissenters: Jeffery Schmid and Austan Goolsbee.
Schmid reiterated that his dissent was driven by inflation still being “too high,” an economy showing momentum, and what he views as a labor market in balance. That assessment is difficult to square with the data. Unemployment has risen in recent reports, job creation has weakened, and even Jerome Powell has acknowledged that official job growth figures may be overstated by roughly 60,000 jobs per month—potentially turning negative as far back as April. Schmid has consistently leaned hawkish and dissented at the October 29 meeting as well. Notably, he will not be a voting member next year.
More surprising was the dissent from Goolsbee, once considered one of the Fed’s biggest doves. He expressed discomfort with front-loading rate cuts and assuming inflation is transitory, drawing comparisons to 2021. The comparison is imperfect. Back then, there was $5.2 trillion in fiscal stimulus, the Fed Funds rate was at zero, and the Fed was buying roughly $95 billion per month in Treasuries and MBS. Today’s backdrop looks very different.
Goolsbee also suggested the labor market has been relatively stable, citing ratios like the unemployment rate due to a shrinking labor supply from retirements and immigration trends. But the unemployment rate has already climbed from 4.1% to 4.4% since June, and upcoming October and November jobs reports could show further softening.
To his credit, Goolsbee did note that the Fed may be able to cut rates meaningfully next year—but his messaging has been anything but consistent.
Looking ahead, Anna Paulson, a voting member next year, struck a notably dovish tone. She sees greater risk to the labor market than to inflation and believes inflation could cool further as tariff-related price pressures fade by mid-year. She also emphasized that policy remains restrictive and that there is room to cut.
Bottom line: The Fed’s voting composition in 2026 skews meaningfully more dovish, increasing the likelihood of rate cuts as we move forward.
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National Retail Federation – Retail Sales
The National Retail Federation released its November Retail Sales report, showing sales up a modest 0.12% month over month. While still positive, the result was underwhelming given the record-breaking Black Friday headlines.
It’s worth noting that the report does not include Cyber Monday, which fell on December 1, and the NRF indicated that timing likely explains part of the miss.
Core sales—excluding autos, gas stations, and restaurants—were slightly negative, down 0.04% for the month.
Year-over-year growth remains solid, but retail sales are a key barometer of consumer health. This report suggests spending momentum may be cooling, and it’s something worth watching closely as we head into the new year.