Macro Signals for November 2025

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Housing Policy

Protracted shutdown squeezes housing programs as budget impasse drags on.

What happened: The US government shutdown has now extended into a second month, and while potential SNAP and ACA cuts have dominated headlines in recent days, the US Department of Housing and Urban Development (HUD)’s halting of several housing program operations has been somewhat overlooked.

The agency-level impact of the shutdown has varied. Still, HUD ranks alongside agencies like the Department of Education (87%) and the Department of Labor (76%) with one of the highest shares of furloughed employees at 71%, as of mid-October estimates.

The United States Department of Housing and Urban Development (HUD) headquarters in Washington, D.C. An estimated 71% of HUD staff remain on furlough.

Why it Matters: Outside of some essential functions, HUD’s operations have virtually halted. Previously appropriated funds have allowed public housing authorities to draw on pre-shutdown allocations, while existing Housing Choice Voucher payments are being honored for now. HUD staff have indicated they can fund Operating Fund payments through December. However, no new housing choice vouchers are being issued, and renewals of expiring rental assistance contracts are at risk if the shutdown lasts beyond the current funding buffers.

Maintenance and administrative processing are also on hold, stalling development activity nationally. Construction permits are stuck in review limbo, new grants and insurance applications are on hold, and routine maintenance tasks can't be completed. HUD also let go of its entire staff of building inspectors, leaving a gaping hole in safety oversight for subsidized housing.

Congress should and will continue to debate over the future of HUD funding. Still, the ongoing impasse is beginning to squeeze vulnerable groups and threatens to seriously disrupt the housing sector’s development pipeline.

Low-income households relying on federal rental assistance face growing uncertainty – funding for some housing aid could run dry within weeks if no agreement is reached. Meanwhile, developers and builders are absorbing mounting costs from permitting delays.

Elsewhere, FHA multifamily loan processing has slowed, and no new FHA multifamily applications are being accepted during the shutdown. The USDA’s rural home loan program is on pause, the Small Business Administration (SBA) has halted new loan guarantees, and the National Flood Insurance Program cannot issue new flood insurance policies.

Each day the funding impasse continues, the more housing assistance systems weaken, raising the risk of a cascading hit to housing security and new development in an already undersupplied market.

Monetary Policy

Shutdown-induced 'data fog’ complicates the Fed's policy path.

What Happened: Despite the "data fog" caused by the government shutdown, FOMC officials had the conviction to move forward with their second consecutive 25-basis-point (bps) rate hike at their October policy meeting. The cut was largely expected, but it was not unanimous: one member believed the committee should pause, and another pushed for greater accommodation.

With a second month of key data releases likely to be delayed in November, officials find themselves in a statistical black hole as they approach crucial year-end policy decisions. 

Why It Matters: Absent new government data that could provide an updated view of the macroeconomic balance of risks (labor risks vs. inflation risks), futures markets' forecasts remain tethered to existing assumptions about those risks.

As of the morning of November 3^rd, Federal Funds Rate futures price a 70.3% chance of a 25-basis-point cut at the FOMC's December policy meeting and a 29.7% chance of no change. The forecast suggests markets remain dovish despite the lack of official labor data since August.

Nodding to this issue, Jerome Powell cautioned during his post-meeting press conference that a December rate cut is not a foregone conclusion, given that policymakers are operating in this "data fog", creating uncertainty about the appropriate path of policy.

Inflation remains “somewhat elevated,” but tariffs have not filtered into prices as quickly as some expected. While most economists expect tariffs to cause a one-time price increase and not lead to spiraling inflation, data suggest that these price increases haven't yet fully filtered through to consumer prices.

On the labor market side, Jerome Powell reiterated his view that, because labor supply has shrunk (lower immigration and lower labor force participation), the Fed's rate cuts will have only a limited impact on payroll growth. Still, he believes that some loosening will help keep labor demand from deteriorating further, justifying, in his view, the Fed’s recent cuts.

Powell noted that Fed policymakers are turning to alternative indicators and real-time clues where possible, but admitted that the information void could impact their policy stance. With limited data, the FOMC might proceed more cautiously, but Powell has poured cold water on the idea that cuts were on “autopilot” absent the government reports.

As the calendar turns toward the holidays, everyone from Fed officials to real estate investors is hoping for one gift: a restored flow of information to bring the economic picture back into focus.

Trade and Geopolitics

Trade truce offers supply chain relief, but building costs stay high.

What happened: After a Trump-Xi summit in Seoul late in October, the US and China announced a "framework" trade agreement, signaling a tentative truce in a trade war that has rattled global markets.

Notably, China backed off of new export restrictions on rare earth minerals that had been announced just a couple of weeks before the Trump-Xi summit. Meanwhile, the US stepped back from a previous threat to impose 100% tariffs on all Chinese imports. Officials also indicated that China would resume large purchases of US farm goods, such as soybeans, that it had recently begun restricting.

Why it matters: Thawing trade tensions between the US and China could ease some of the cost pressures affecting US construction and real estate. This year’s escalation led to the doubling of costs for many imported building materials as 100% tariffs were applied to Chinese imports across the board. The tariffs have acted as an effective tax on US builders and developers, who have struggled to pass those costs on to consumers amid continued downward pressure on real estate prices.

US builders and developers have struggled to pass on tariff costs to consumers amid continued downward pressure on real estate prices.

Still, several construction inputs will continue to face a higher tariff regime following the US-China deal than they did before the start of 2025. Some key building products, such as fabricated structural steel and roofing nails, fall under Section 232 or 301 duties, which impose a 50% tariff on goods deemed to threaten US national security or domestic industries, regardless of the recent US-China framework.

Further, while the new framework pivots away from the Administration’s most extreme tariff threats, it does not eliminate these import fees completely. Rather, it stabilizes them at a higher, new normal.

Commerce Secretary Howard Lutnick confirmed the deal would lock in US tariffs on Chinese goods at around 55% going forward, which combines a 20% "fentanyl" tariff, a 10% reciprocal tariff, and a 25% tariff from the previous presidential term.

Fentanyl emerged as a flashpoint in US-China trade tensions, as the Trump Administration pushes China to crack down on the exports of precursor materials that often make their way into the United States.

Overall, the deal helps insert more predictability into the construction market, where developers have struggled to keep pace with the volatility of an escalating trade war. Nonetheless, material costs will remain elevated in the construction industry unless domestic alternatives are made or tariffs are rolled back further.

The pause in trade hostilities with China should also prevent new price shocks. By sidestepping another round of tariff hikes or export bans, the framework helps reduce the risk of abrupt price swings across key inputs—from lumber to appliance components. China’s rare-earth concessions are also significant, as many of these minerals are vital for electronics and advanced building systems.

Experts caution that this is not a permanent peace. According to BlackRock's geopolitical risk dashboard, global trade protectionism and US-China strategic competition remain among the three most significant risks to market stability. The US–China rivalry in technology and influence will likely continue to see-saw.

For now, the October framework offers a welcome—if modest—tailwind, easing the immediate risk of broad tariff escalation and slightly improving the material cost outlook heading into 2026.