New Jobs Report Shows Stronger Than Expected Results

The March jobs report, released Friday from the U.S. Bureau of Labor Statistics, defied odds predicted by analysts—indicating a slightly positive upward trend in employment from February, which will likely keep interest rates high in the coming months. 

The data showed an addition of 303,000 jobs in March compared to 270,000 in February, an increase higher than the average monthly gain of 231,000 over the past year. Additionally, unemployment ticked down slightly to 3.8%.

Job gains in March were the strongest in healthcare (+72,000), government (+71,000) and construction (+39,000), and average hourly earnings jumped 4.1%, pushing ahead of the recent inflation level of 3.2%. This indicates that “consumers have seen their spending power improve. However, shelter costs outpaced wage growth, growing 5.4% in February,” explained realtor.com® Sr. Economic Data Analyst Hannah Jones in a statement.

Given this slowly consistent positive trend of employment and job growth, the Federal Reserve will likely not cut interest rates until after July—which means mortgage rates stand to remain high. 

What does today’s jobs report mean for the housing market? 

“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,” said Bright MLS Chief Economist Dr. Lisa Sturtevant. “Overall, there will be more home sales in 2024 than there were last year, but the timing is uncertain. March home sales look to be tracking below last year’s levels even as inventory is starting to increase. 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.”

“It’s worth mentioning that mortgage rates—which have spent a year over 6.5%—do not solely depend on decisions made by the Fed, however, but rather, “falling inflation and cooling employment growth,” says Jones.

“For now, the market expects the first interest rate cut to come in the June meeting, but unexpectedly hot or cool economic data in the coming month could alter the expected timeline,” she adds. “Though mortgage rates will likely ease by the end of the year, housing will remain relatively expensive and present a challenge to many buyers. Nevertheless, falling mortgage rates can also help ignite seller activity, which would relieve some of the upward pressure on home prices.”

For the full report, click here.