Industry Insights: Ten Things to Know From September’s Market Pulse Webinar

Highlights: 

• The U.S. economy is experiencing mixed signals, with a robust stock market coexisting with a softening labor market, uneven consumer spending, and slowing manufacturing.

• Import cost increases are distorting economic data, and a widening "k-shaped economy" shows upper-income households stable while lower-income households struggle.

• The housing market faces affordability issues, with a significant slowdown in Sunbelt suburbs, while the mortgage industry is seeing increased technology adoption, a focus on credit education, and ongoing debates around regulations and the three-bureau system.

The U.S. economy continues to change rapidly. From a slowing labor market to a struggling housing market, several key factors are shaping how businesses, and consumers, are behaving and planning for the future. 

Understanding what’s happening now can help us prepare for what may come next. Below, we break down the six key macroeconomic trends from our September 2025 Market Pulse webinar as well as four emerging mortgage industry themes to watch throughout the rest of the year. 

Be sure to register for October’s webinar so you have first access to the most up-to-date trends and data. 

Top Six Trends From the Current U.S. Macroeconomic Landscape

To open the conversation, Dr. Rob Wescott, President of Wescott Strategic Advisors, shared a macroeconomic update, dissecting the latest market changes and trends to watch, from consumer spending to the stock market.

1. Mixed Economic Signals but a Robust Stock Market

The U.S. economy shows conflicting trends: labor markets are softening, consumer spending is uneven, and manufacturing is slowing. Despite this, the stock market remains strong, particularly benefiting wealthier households. This creates a unique environment where an economic slowdown coexists with a booming stock market.

2. Increases in Import Costs Distorting Economic Data

The recent changes in trade rules and costs are making economic data difficult to interpret. Businesses imported heavily in Q1 2025 to get ahead of these changes, leading to a sharp drop in imports in Q2. This import collapse significantly impacted Q2 GDP, highlighting how tariffs can skew economic indicators. There are also concerns about potential goods shortages for the upcoming winter holiday season due to these disruptions.

3. Softening Labor Market and Consumer Spending

The labor market is clearly weakening, with job creation slowing significantly. For the first time in years, there are more job seekers than job openings, and a quarter of all currently unemployed individuals have been out of work for six months or longer. Consumer spending has also noticeably decreased in 2025, especially since trade policy discussions began in December 2024, suggesting that price concerns are impacting consumer behavior.

4. Widening Consumer Sentiment Gap

We're seeing more of a k-shaped economy, where upper-income households are stable thanks to homeownership and a strong stock market. In contrast, lower-income households are struggling, prompting businesses like fast-food chains to offer more value-meal options. This widening gap between income levels may be a key indicator of changing consumer behavior for businesses.

5. Stock Market Sustainability and Manufacturing Trends

While the strong stock market supports high-income spending, its long-term sustainability is a concern. Corporate profits, which surged over the past five years, have been flattening and declining since Q4 2024, with experts expecting a continued slowdown. The S&P 500 Index has outpaced profit growth and is nearing Dot-Com bust valuation levels. 

Meanwhile, manufacturing is seeing a "sidewinding" trend: strong capital expenditures in data centers contrast with sluggish performance in other sectors, and the manufacturing Purchasing Managers’ Index, a monthly survey where purchasing managers in the industry answer key questions about their companies’ performance and provide an early look at potential economic change, remains in contraction. The Federal Reserve is now more likely to focus on the slowing labor market, with markets anticipating further rate cuts.

6. The Sunbelt Suburbs: A Housing Market Case Study

The housing market continues to face significant affordability issues due to high prices and mortgage rates. While recent and future interest rate cuts might help, long-term rate movements will be more impactful than short-term Fed adjustments. The cost of a median house has grown much faster than income, and new housing construction isn't keeping up with population growth.

Historically, housing markets have been categorized into Sunbelt, Coastal, and Industrial regions, with the Sunbelt, which includes cities like Atlanta, Miami, Phoenix, and Dallas, previously driving most housing growth. A new trend shows a significant slowdown in Sunbelt suburbs, where housing supply curves are flattening and becoming less sensitive to higher prices. This slowdown is attributed to various factors, including the "Raise the Drawbridge" effect, zoning and environmental regulations, political shifts, and space constraints, impacting residential building in these formerly high-growth markets.

Five Things You Should Now Know About the Mortgage Market Today

The housing market has been a hot topic in 2025 as everyone tries to grapple with the larger economic uncertainty. In September’s webinar, Joel Rickman, GM and SVP of U.S. Mortgage and Verification Services at Equifax, engaged in an insightful discussion with industry experts Greg Holmes, Chief Revenue Officer at Xactus, and Brock Tate, First Vice President and Mortgage Retail Production Manager at Trustmark, on how the mortgage industry is changing and what you should know about what happens next. 

1. Broader Impact of Interest Rates on Housing

Beyond rates and house prices, other factors are hindering a full housing market recovery. These include soaring insurance premiums in high-risk areas (due to climate change), elevated property taxes, and increased home maintenance costs. These issues are delaying homeownership for millennials and Gen Z.

2. Technology's Role in Housing Affordability

The mortgage industry has significantly increased its use of technology and automation since the pandemic. Tools like robotic process automation, AI, and improved verification services for assets, income, and employment are crucial. These advancements allow lenders to handle complex situations more efficiently, provide faster and more accurate approvals, and expand access to credit for a wider range of consumers.

3. Credit Education: Helping Borrowers and Lenders

Credit education is a vital part of the mortgage process. New education tools are highly valued for helping consumers understand credit, how to build and maintain it, and how their actions affect their credit scores. This transparency empowers borrowers to make informed decisions, potentially leading to quicker improvements in credit scores, which benefits both consumers and the industry.

4. Regulations and the Three-Bureau System Debate

Recent regulatory changes, such as the new bill on trigger leads, aim to give consumers more transparency about credit inquiries and reduce unsolicited calls. While this change could improve consumer experience, the industry is grappling with other changes, including the complex implications of potentially moving away from the traditional three-score credit bureau model. This significant shift would require careful consideration from all stakeholders to ensure industry stability and continued access to affordable mortgages, while also addressing the financial impact on lenders from applications that don't result in closed loans.

Keep Your Business Goals Within Sight

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We hope you will join us for our October 2025 Market Pulse webinar taking place on Thursday, October 16, 2025, where our talented and dynamic panel will discuss their latest insights on overall consumer financial health and navigating uncertainty and consumer shifts as we head into the holiday shopping season. To ask questions in real time and gain deeper insights before anyone else, you must be there. Don’t miss it!

Interested in learning how personalized insights can drive your business forward? Sign up for a complimentary 60-minute Market Pulse Advisory with one of our experts. 

Find our monthly Small Business Insights, National Consumer Credit Trends reports, the Market Pulse podcast, and more at our Market Pulse hub. 

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Source: 

1. Equifax, September 2025 Market Pulse Webinar