The new home affordability crisis is showing signs of ending for the first time in nearly three-and-a-half years. The median sale price of a new home sold in the United States has dropped below the upper threshold of affordability that determines whether the typical American household can afford the monthly mortgage payment on the typical new home sold in the U.S.

That threshold is defined by having a mortgage payment that represents no more than 36% of household income, which lenders have historically used to determine whether they will loan money to a household that has no other debt. For October 2025, a household earning the median household income would that bought a new home at the month's median sale price of $392,300 would see their mortgage payment consume 34% of their monthly household income, which puts the typical new home within affordable reach.

For households that do carry other debt, lenders prefer their monthly mortgage payments consume no more than 28% of their pre-tax household income to ensure they have financial resilience to deal with unexpected expenses when their mortgage payments fall below these affordability thresholds. At 34% of its monthly household income, the median new home sold in October 2025 would be affordable for median income-earning households that carry low levels of other debt, the first time that's even been possible since March 2022.

The latest update of our chart tracks the changing relative affordability of the typical new home sold in the U.S. is for the typical American household with respect to the mortgage lending industry's key affordability thresholds from January 2000 through October 2025.

The National Association of Realtors explains the main factor why new homes have suddenly dropped into the range of affordability:

Prices for newly built homes fell to a four-year low in the fall as builders cut prices, according to a report delayed by the government shutdown.

The median sales price for new homes that went under contract in October was $392,300, down 8% from a year earlier and the lowest level since 2021, the U.S. Census Bureau reported on Tuesday.

New-home prices have been trending down since late 2022, after the affordability crisis priced many potential buyers out of the market. Homebuilders responded by cutting prices and boosting incentives.

This month, 40% of builders reported cutting prices, while 67% reported using sales incentives such as mortgage rate buydowns, according to the leading survey of homebuilder sentiment.

Meanwhile, sales of new homes improved year-over-year as mortgage rates were also lower on average in October 2025, contributing to the improved affordability of new homes for the typical American household:

Sales of new single-family houses were at a seasonally-adjusted annual rate of 737,000 in October, little changed from the prior month but up 19% from a year earlier.

Transactions rose as falling mortgage rates and prices both contributed to making new homes more affordable for prospective homebuyers.

Mortgage rates averaged 6.25% in October, down from 6.43% in October 2024, according to Freddie Mac.

The average price of a new home sold in October 2025 was $498,000, which was three percent higher than September 2025's average sale price of $483,500.

Looking at what that means for new home builders, we find time-shifted (centered) trailing twelve month average of the total value of new homes sold in the United States is $29.11 billion. We find the lower sale prices of new homes is contributing to an upward trend in the number of sales, but we find the average sale price of a new home is relatively stable, or flat.

The following charts present the U.S. new home market capitalization, the number of new home sales, and their sale prices as measured by their time-shifted, trailing twelve month averages from January 1976 through October 2025.

Rising trend for new home sales

Rising trend for average home prices

Following up our coverage of August 2025's potential statistical fluke increase in the number of new home sales, revisions to the sales data released on 13 January 2026 confirms the August 2025 sales figures were indeed a fluke.

References

U.S. Census Bureau. New Residential Sales Historical Data. Houses Sold. [Excel Spreadsheet]. Accessed 13 January 2025. 

U.S. Census Bureau. New Residential Sales Historical Data. Median and Average Sale Price of Houses Sold. [Excel Spreadsheet]. Accessed 13 January 2025. 

Image credit: Microsoft Copilot. Prompt: "An editorial cartoon featuring a real estate agent meeting a young family that earns the median household income who tells them they can afford to buy a new home, a calendar in the room shows it is October 2025", followed by a second prompt to "Make the family's expression happy and make the cartoon more colorful."

Trade between the U.S. and China has been almost fully cut in half since its October 2021 peak. The latest available trade data for October 2025 reveals the combined value of all goods exchanged between the two nations stood at $32.8 billion, which compares with the record peak of $64.7 billion in October 2021.

October is a significant month for U.S.-China trade because U.S. exports of soybeans to China typically peak during the month. In 2025 however, even though China has been buying U.S. soybeans, sales have been muted with the result exports have significantly lagged the typical seasonal boost seen in previous years.

That outcome is a direct consequence of the tariff war between the two nations. Part of China's trade war strategy has been to purchase soybeans from other nations, with Brazil gaining much attention from China's soybean purchasers.

The following chart shows how the combined value of trade between the U.S. and China stands through October 2025 in the context of how trade between the nations has developed since January 2017.

The chart features a counterfactual of how the rolling twelve month average value of goods exchanged between the U.S. and China would have grown in the absence of the global tariff war between the two nations. Through October 2025, we find the gap between that counterfactual and the actual trajectory of U.S.-China trade has opened up to $11.5 billion, with a cumulative loss of $43.4 billion since February 2025.

Looking forward, the U.S. and China reached a one-year trade deal on 1 November 2025. We'll see over the next several months how that deal might change the overall trajectory of the rolling twelve month average. Assuming that deal is not disrupted by President Trump's just-announced 25% tariff on nations trading with Iran because of that nation's repressive government's crackdown against protestors.

All this discussion emphasizes a critical point. Rather than a tool to raise revenue, tariffs have become a tool for addressing geopolitical concerns during President Trump's second term. They've become more than a means of regulating trade.

References

U.S. Census Bureau. U.S. International Trade in Goods and Services (FT900). U.S. Trade in Goods with China, Not Seasonally Adjusted, Nominal Figures, Total Census Basis. [Online database]. Accessed 8 January 2025.

Image Credit: Close up of a metal container with writing photo by Zalfa Imani on Unsplash.

The U.S. Bureau of Labor Statistics released its employment situation data through December 2025, resuming their regular reporting schedule after the delays caused by 2025's Senate Democrats' government shutdown fiasco.

The jobs data was mixed for working U.S. teens. Older teens, Age 18-19, saw their numbers among the ranks of the employed rise in December 2025. With a seasonally-adjusted 3,547,000 older teens earning wages, the percentage of the older teen population rebounded to 42.9%.

Unfortunately, younger teens, Age 16-17, saw their numbers fall again, dropping to a seasonally adjusted 1,938,000 and continuing a multi-year, long-running trend. That downward trend is most evident when looking at the share of the younger teen population with jobs. The employment-to-population statistic for this demographic dropped to 20.3%, its lowest level since January 2021's 20.4%.

The following chart visualizes these trends along with the seasonally-adjusted total Age 16-19 employment level:

Sharp-eyed readers will catch that the number of employed Age 16-17 teens and Age 18-19 teens doesn't add up to the combined Age 16-19 figures in these charts. That's because each age demographic gets its own seasonal adjustment. If you want numbers that do add up within a small margin of error, you'll want to access the BLS' non-seasonally adjusted employment figures.

Really sharp-eyed readers will also note the seasonally adjusted data presented in the charts doesn't match our last edition in this series. The BLS revised its seasonally adjusted data with the December 2025 employment situation report, with the revisions affecting all previously reported data from January 2021 onward. The revisions do not affect the nonseasonally adjusted data, which remains unchanged from their previously reported figures.

Reference

U.S. Bureau of Labor Statistics. Labor Force Statistics (Current Population Survey - CPS). [Online Database]. Accessed: 9 January 2026.

Image credit: Jobs - get the facts about occupations poster by Library of Congress. Public domain.

As expected, the first full trading week of January 2026 was an exciting one for the S&P 500 (Index: SPX), which closed out the week at 6,966.28, a new record high and 1.6% higher than it ended the previous trading week.

Although we anticipated the week would be a good one for oil and gas industry stocks because the U.S.' successful extraction of Venezuela's dictator from power during the preceding weekend, there were two other big news events to push stock prices higher across the board during the week that was.

The first of those additional headlines that moved the markets originated at the annual Consumer Electronics Show in Las Vegas on Tuesday, 6 January 2025. Nelson Huang, the CEO of Nvidia (Nasdaq: NVDA) announced the company was in full production of its next generation AI-industry leading computer chips and that data storage was becoming a constraint on the sector's growth, which prompted the stocks of hard drive and memory storage to surge.

The second additional headline came on Friday, 9 January 2025 with the release of the December 2025 employment situation report. At first glance, it contained the bad news that 2025 closed out with anemic job growth. But here, this bad news increased the likelihood the Fed will cut the Federal Funds Rate in 2026 after a pause, which benefits the companies that will be borrowing big to support their investments in AI technologies. The CME Group's FedWatch Tool projects the Fed will hold the Federal Funds Rate steady until 17 June (2026-Q2), when it anticipates a quarter point rate cut. The tool forecasts another quarter point reduction on 16 September (2026-Q3).

Investor attention however appears to remain focused on the current quarter of 2026-Q1, given the potential the Fed will announce its next rate sometime during the quarter. The latest update finds the trajectory of the S&P 500 falling within the middle of the chart's redzone forecast range, which assumes investors would be focused on 2026-Q1 while it runs.

There was a lot of new information investors had to absorb during the trading week ending on Friday, 9 January 2026. Here are the week's market-moving headlines:

Monday, 5 January 2026

• Signs and portents for the U.S. economy:
• Trump says Venezuela’s president Maduro captured after pre-dawn operation
• US pushes oil majors to invest big in Venezuela if they want to recover debts
• US oil companies gain after Trump signals access to Venezuela reserves
• Venezuela's oil exports paralyzed amid political turmoil, sources say
• Venezuela's oil supply to rise in years ahead and depress prices, say analysts
• Oil settles $1 higher as traders assess Venezuela upheaval
• Oil prices forecast to ease in 2026 under pressure from ample supply
• OPEC+ maintains plan for steady crude output amid global friction
• US factory sector contracts for 10th straight month in December
• Record copper price signals accelerating race for supplies
• Fed minions think inflation may drop to 2% in 2026, below the 3% they've been targeting in last three years. Also starting to think tariffs reduce inflation rather than increase it:
• Fed's Paulson 'cautiously optimistic' three-month inflation will be 2% by year-end
• Fed's Paulson signals another rate cut could take a while
• Tariffs may lower inflation, SF Fed research suggests
• Fed's Kashkari sees risk jobless rate could 'pop' higher
• Bigger trouble developing in China:
• China's services growth hits 6-month low in December, shows private PMI
• BOJ minions say they're not done turning the screws on Japan's interest rates:
• Bank of Japan chief vows to keep raising interest rates
• Japan's factory activity steadies as demand declines slow, PMI shows
• Dow logged a record close as Wall Street rallied on U.S. action in Venezuela
• Dow hits record, energy stocks end higher after US strikes Venezuela
• Dow notches new all-time high as Chevron's pop propels the index

Tuesday, 6 January 2026

• Signs and portents for the U.S. economy:
• WTI crude extends decline after Trump says Venezuela will send oil to US
• China buys more US soybeans, total purchases near 10 million tons
• Fed minions talk about potential 2026 rate cuts:
• https://www.reuters.com/sustainability/boards-policy-regulation/fed-should-deliver-big-rate-cuts-this-year-miran-tells-fox-business-2026-01-06/
• Fed's Barkin says future rate changes should be fine-tuned based on incoming data
• BOJ minions pressured to target 2% annual inflation:
• Government panel member urges BOJ to anchor inflation expectations around 2%
• Japan lobby group for small firms urges government action on inflation
• Japan's cash in circulation falls for first time in 18 years in 2025 on BOJ stimulus exit
• ECB minions get better economic data for Eurozone:
• Euro zone growth slows in December but completes strongest quarter since 2023
• Euro zone inflation dips, growth holds up, backing ECB's sanguine narrative
• German inflation slows more than expected in December
• S&P 500 notches fresh all-time high with 7,000 now in sight
• S&P 500, Dow close at all-time high as stocks climb on tech trade revival
• Chip stocks jump on AI optimism; Dow ends at record high
• Nvidia, AMD's announcements at CES see largely bullish views from analysts
• Micron, Sandisk, memory stocks continue to soar amid AI demand
• Gold inches closer to record peak as geopolitical risks lift safe-haven demand

Wednesday, 7 January 2026

• Signs and portents for the U.S. economy:
• US will ban Wall Street investors from buying single-family homes, Trump says
• US job openings slide to 14-month low; hiring weak in November
• US job openings decline more than expected in November
• US bank profits to surge on investment banking jump in fourth quarter
• US service sector activity picks up in December, employment rebounds
• Oil falls, stocks mixed after Trump reveals plan for Venezuelan oil
• Venezuelan oil sales to US to start immediately, continue indefinitely, Trump official says
• Trump targets defense contractor pay, buybacks and dividends
• Bigger trouble, stimulus developing in China:
• Chinese refiners expected to replace Venezuelan oil with Iranian crude, traders say
• Eurozone economy described as "benign":
• Euro zone economy ends 2025 on benign note even as risks linger
• Wall Street ended mostly lower as investors weigh latest labor data
• S&P 500, Nasdaq climb on tech boost, investors take labor data in stride
• SFR, PE stocks wilt as Trump seeks to ban institutional investors from buying homes
• Defense stocks fall on Trump warning to curb buybacks, dividends

Thursday, 8 January 2026

• Signs and portents for the U.S. economy:
• Oil settles up 3% on Venezuela news, supply worries in Russia, Iraq and Iran
• US oil companies say they need guarantees to invest in Venezuela, FT reports
• BEA says it will use US September, November CPI averages to calculate October PCE inflation
• US October trade deficit lowest since 2009 as imports decline
• US container imports dropped 5.9% in December on continued China slump, Descartes says
• US third-quarter productivity rises at fastest pace in two years
• Trump orders his 'Representatives' to buy $200 billion in mortgage bonds
• Bessent: Goal of MBS buys is to match Fed run-off
• Fed minions expected to cut U.S. interest rates a little during 2026, one minions wants to see bigger drop in rates:
• Fed to cut rates slightly this year, CBO forecasts
• Fed's Miran says he's looking for rate cut of 150 basis points this year
• US December jobless rate likely at 4.6%, Chicago Fed says
• Bigger trouble developing in China:
• China warns of battery industry overcapacity risks
• Chinese refiners expected to replace Venezuelan oil with Iranian crude, traders say
• Protests erupt in Iran capital after exiled prince’s call; internet cuts out soon after - AP Explains
• Treasury's Bessent says Iran facing precarious moment, economy in trouble
• Bigger trouble, wage inflation developing in Japan:
• China curbs rare earth exports to Japanese companies after dual-use ban, WSJ reports
• Bank of Japan sees wage hikes continuing, China tension clouds outlook
• U.S. stocks end mixed as investors assess labor data, defense trade
• Wall Street ends mixed as tech dips, defense stocks rally
• Apple trades in red for seven straight sessions

Friday, 9 January 2026

• Signs and portents for the U.S. economy:
• US job growth stuck at stall speed in December; unemployment rate dips to 4.4%
• Oil gains as market assesses protests in Iran, dealmaking for Venezuela
• Trump urges US oil giants to repair Venezuela's 'rotting' energy industry
• Bessent says US Treasury can easily cover any tariff refunds
• Fed minions still not expected to cut rates in January 2026, see housing affordability as a supply problem, are still fighting Bidenflation, no comment on jobless rate coming in lower than they expected:
• January Fed rate cut bets dip after latest labor report
• Fed seen on longer rate-cut pause after December jobs data
• Two Fed officials say key to fixing US housing more about supply than financing
• Fed's Bostic says high inflation still central bank's main challenge -radio interview
• U.S. economy adds 50,000 jobs in December, unemployment rate at 4.4%
• Bigger trouble, stimulus developing in China:
• China car sales may stagnate in 2026, strong EV export growth unlikely to last
• China's consumer inflation scales 3-year high but deflation battle far from over
• S&P 500, Dow set all-time closing highs after jobs report, no SCOTUS ruling on tariffs
• S&P 500 notches record high close driven by Broadcom, other chipmakers

The Atlanta Fed's GDPNow toolestimates real GDP growth in the U.S. during 2025-Q4 jumped to +5.1% from the +3.0% growth it anticipated a week earlier.

Image credit: Microsoft Copilot Designer. Prompt: "An editorial cartoon of a Wall Street bull celebrating new record highs in the S&P 500 index".

At its core, the expression "outside-the-box thinking" refers to ideas that break out of the bounds of convention. This series features innovations that, somehow or another, do just that. In the case of today's featured example of inventiveness, quite literally.

Imagine you are carrying a briefcase as you walk in a public setting. The briefcase contains very important documents and valuable objects. Now imagine you've just realized that you're being followed by a shady character, who will soon make their move to take that briefcase and all its contents away from you. How will you keep from becoming just another robbery statistic? Better still, how will you avoid becoming the victim of an assault in the process?

Although it was never patented, inventor John H.T. Rinfret came up with a unique invention to address the problem of being robbed by thieves seeking to acquire briefcases and their valuable contents. Here's the story of his innovative "anti-bandit bag" from Atlas Obscura:

In 1963, The Manager and other publications described a spinoff—the Pug anti-bandit bag—that, rather than smoke, ejected the contents of a bag once a thief grabbed it.

Invented by John H. T. Rinfret, who was purportedly a frequent target of robberies, the Pug anti-bandit bag featured a spring attached to the handle. If a thief tried to steal the bag, the courier needed only to crook their thumb, and the bag flew open, its contents spewing everywhere. Presumably, this would frighten away the robber, and the day would be saved.

Necessity, as they say, is the mother of invention and by this account, Rinfret truly had the need. The following video shows how his innovation, the Pug Anti-Bandit Bag, worked in action after its proverbial panic button was pressed:

Alas, Rinfret's innovation never reached the marketplace. Weird Universe theorizes why not:

From what I can gather, Rinfret hoped to rent his anti-bandit bags to companies that used couriers to carry important documents or money. He definitely put a lot of work into promoting his invention. He even came out with a new and improved version of the bag the following year. But evidently few companies were interested in using his bag.

Possible reasons why: 1) a bandit might pick up the money instead of running away; or 2) what if the spring was activated by accident, spraying money everywhere?

If you've ever had to pick up the contents of a briefcase or suitcase that wasn't securely closed and came open, dumping its contents on the ground, you well understand why Rinfret's anti-bandit briefcase never caught on. Even if it worked exactly as intended, you would be guaranteed to still have a mess to clean up. A mess that you could expect to have to deal with far more often than you might ever have your briefcase attempted to be stolen from you.

In that sense, it was too outside-the-box to be successful.