In a rebound from February’s downcast numbers, a report from the Bureau of Labor Statistics on April 3 showed the U.S. economy gaining 178,000 jobs in March, with the unemployment rate sliding slightly to 4.3%. Job gains occurred in healthcare, construction and in transportation and warehousing. Federal government employment continued to decline. Average wages were up by 3.5% year-over-year while the latest inflation data showed prices rising 2.4% on an annual basis.
The jobs stability is good news for the Fed, likely meaning that they will hold interest rates in place for now.
Bright MLS Chief Economist Lisa Sturtevant commented that while average wages are growing faster than inflation, it is still a very challenging housing market for many buyers, including many first-time buyers.
“Ongoing geopolitical and domestic policy uncertainty is heightening consumers’ economic anxiety, which could adversely impact the spring housing market,” she said. “People are typically hesitant to make major financial commitments like buying or selling a home when they feel uncertain about the broader economy.
“Despite strong wage growth, housing affordability has taken a hit in recent weeks. While there was a glimmer of hope when rates dipped below 6% in February, the 30-year fixed mortgage rate has climbed to a seven-month high, increasing for five straight weeks. This jump in rates has stalled the momentum we expected for the spring season, as the cost of financing has risen significantly in just the last month.”
Sturtevant added that a mixed picture in the labor market complicates the outlook for a rate cut in the first half of 2026.
“The Federal Reserve meets later this month and the decision on rates will be highly dependent on inflation data that will be released next week,” she concluded. “The noise and uncertainty across the labor market, mortgage market and overall economy suggest that housing market activity will continue to be subdued as we head into April.”
Realtor.com® Senior Economist Jake Krimmel agreed that the jobs report was positive, but also that “we are far from out of the woods when it comes to the economic outlook. Much of March’s survey window predates the worst of the war-related economic disruption, so March’s upside surprise may not hold up. Taking the two months together, the three-month rolling job growth average now sits at +68,000. Despite an uncertain economic outlook, the labor market continues to show resilience, even if the line between stabilizing and stagnating remains thin.”
Krimmel noted that the Fed and those watching the broader economic outlook can breathe a small, but meaningful sigh of relief because the stagflation scenario that had been building over the past few weeks looks a little less threatening.
“For housing, the report renews some hope heading into April after a turbulent March,” he said. “Construction added 26,000 jobs, a potential leading indicator for housing supply and demand as the season ramps up. The broader labor market picture won’t boost consumer confidence much, but it probably won’t make it worse either.
“This is extremely important given mortgage rates have risen for five straight weeks and are now pushing 6.5%. Despite potential headwinds, the spring housing market has not been derailed yet, with pending sales and new listings posting year-over-year gains. The jobs report does not change the fundamental challenges facing buyers and sellers, namely affordability and broader uncertainty, but given the volatility of the past month, we will take this small win.”
