The Economy Is Cooling — And That’s Exactly What Markets Want to See

This week’s economic data continued to confirm a trend that’s been developing for months: the U.S. economy is slowing, but it’s doing so in an orderly way.

Labor market indicators showed fewer jobs being created, reduced demand for workers, and moderating wage growth. These are the kinds of signals the Federal Reserve has been watching closely, as labor-driven inflation has been one of the biggest challenges of the past few years.

For mortgage rates, this matters because easing wage pressure helps inflation cool — but that doesn’t mean rates drop overnight. Bond markets need confirmation across multiple reports, especially inflation data, before making a sustained move.

At the same time, housing fundamentals remain strong. Despite scary headlines, foreclosure activity is near historic lows, and housing supply remains tight. Builders have not meaningfully increased production, which limits inventory even as demand stabilizes.

The result is a market that feels calmer and more balanced than it has in some time. Buyers aren’t facing the frenzy of recent years, but long-term fundamentals remain intact.

The takeaway is simple: preparation beats prediction. Staying informed and positioned allows buyers to move when opportunity appears — rather than chasing headlines or waiting for a perfect moment that may never come.

If you’re watching rates or planning a move, this is a market where patience and readiness go a long way.