November CPI Data Comes in Much Lower Than Expected

The November 2025 Consumer Price Index (CPI) report showed inflation slowing more than expected. Headline CPI rose 2.7% year over year. Core inflation, which excludes food and energy, came in near 2.6%. Both figures were below forecasts.

The report raised new questions about data accuracy. A recent government shutdown disrupted data collection, which may have pushed inflation readings lower than reality. Even with that uncertainty, financial markets still viewed the report as positive for interest rates.

It is important to note that most of the improvement in bond yields happened before the CPI data was released. The report reinforced existing expectations rather than creating a new shift. After the release, longer-term Treasury yields moved slightly lower, including the 10-year Treasury yield.

Treasury yields matter for housing because mortgage rates tend to follow longer-term bond rates. When yields fall, mortgage rates often improve over time. This relationship is especially relevant for buyers and homeowners in King, Pierce, and Snohomish counties.

CPI also marked the final top-tier economic report of 2025 with the ability to move interest rates in a meaningful way. Rates can still change between now and January. However, large moves driven by new economic data are less likely during this period. Markets typically wait for fresh inflation and employment data in the new year.

For the Puget Sound housing market, this creates a more stable short-term rate environment. Buyers may see fewer sudden rate swings. Sellers may benefit from steadier buyer confidence. Still, one inflation report does not set a long-term trend.

Local housing conditions remain critical. Inventory levels, pricing trends, and buyer demand continue to shape outcomes more than national headlines alone. As 2026 approaches, future inflation reports will play a larger role in determining the next direction for mortgage rates.

Here’s a link to the BLS website for the data: Click here.