Contradiction of robust job growth and a sluggish housing market isn’t over yet

___

For the past few years, fears of a recession have been fickle, teasing us at every turn. Despite its low-rumble threat, however, unemployment remains low — both very good and very bad for the housing market.

Realtor.com’s Claire Trapasso and the U.S. labor market say 300,000 more jobs were added in March, bringing the unemployment rate down to 3.8%. “A low unemployment rate is good for the housing market because most people don’t buy homes if they’re unemployed—or worry they’re about to be laid off,” she says. “However, it also means the U.S. Federal Reserve may hold off cutting interest rates for a little longer as it tries to bring inflation down to its 2% target.” The result? Mortgage rates are not expected to go down any time soon.

Realtor's chief economist Danielle Hales says it’s a mixed bag. “The weaker the labor market appears, the more likely we’ll see rate cuts sooner. But the more likely it is people will struggle to find jobs and not be interested in making large purchases like homes.”

While rates appear theoretically low (one generation recalls them in double digits), they are far from rates many homebuyers—already dealing with high prices and fierce competition over a limited supply of homes on the market—had been dreaming of this spring.

The mid-Atlantic’s Bright MLS Chief Economist Lisa Sturtevant said, “Some had been hoping that the Federal Reserve would cut interest rates at its June meeting,” in a statement. “However, with today’s strong jobs report, it is all but certain that the first rate-cut won’t be before July. As a result, mortgage rates are likely going to stay elevated for longer” — something that poses a challenge for buyers as the housing market kicks off in earnest.

“Homebuyer demand is still strong, but there will be some prospective homebuyers who are going to wait for rates to come down later this year,” Sturtevant said. “The traditionally busy spring housing market could be pushed into summer—or even into the fall—if buyers hold out for the Fed’s rate cut and subsequent drops in mortgage rates.”

Those who do wait? There is a good possibility they might find more homes available to purchase after more than 39,000 people were hired in the construction industry in March. That may translate into more homes going up at a time when they are desperately needed.

“More housing supply is on the way in future months,” Lawrence Yun, chief economist of the National Association of Realtors, said in a statement.

Realtor,TBWS


All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.

J.C. Mier The Mortgage GOAT

Branch Manager/ Loan Officer

NMLS: 258527

Alpha Loan Group- Alterra Home Loans

14800 Quorum Drive, Suite 110, Dallas TX 75254

Company NMLS: 258527 /133739

Office: 469-628-4544

Cell: 469-628-4544

Email: jc@themortgagegoat.net

Web: http://www.themortgageGOAT.net

Avatar

J.C. Mier The Mortgage GOAT

___

Branch Manager/ Loan Officer

NMLS: 258527

Cell: 469-628-4544


Last articles

___









Load more

Mortgage Calculator

___


Scroll top