Alongside
Housing finance payroll employment decreased to 390,200 from
But September’s overall job number was enough to bring the unemployment rate down to 4.8% from 5.2% the month prior. Declining unemployment is a trend expected to continue over the next year, which will also stoke mortgage rate growth, according to Mortgage Bankers Association Chief Economist Mike Fratantoni.
“With respect to implications for the housing and mortgage markets, the drop in the unemployment rate below 5%, and the other indicators of job market strength, are likely to be sufficient for the Federal Reserve to
The impact these factors should have on the broader housing market will be twofold. While climbing interest rates will deter some potential home buyers, more consumers with jobs and September’s 4.6% year-over-year average wage growth will keep housing demand high. The market’s
However, the housing supply
“We note that residential construction employment (including specialty trade contractors) grew by just 3,400 in September, a marked deceleration from August’s pace,” Doug Duncan, chief economist at Fannie Mae, wrote in a released statement. “More robust job growth will be needed to help builders work through their current backlog of orders, which we believe should help to ease supply constraints in this sector.”
Odeta Kushi, deputy chief economist at First American, echoed that sentiment, but noted other numbers that provided some reason for optimism.
“Attract and retain — this labor-intensive industry needs more hammers to build more homes,” she said in a press statement. “The average hourly earnings of production and non-supervisory employees in construction are up 5.8% on a year-over-year basis in September — that's the highest growth since 1982. Residential building is up just over 5% compared with pre-COVID, while non-residential building remains 4.7% below its pre-pandemic level.”