John’s Finance Corner: Labor Market Slows While Home Values Continue to Rise: What It Means for Homebuyers?
As a Senior Loan Officer, it’s crucial to stay informed about the latest economic trends and how they impact the housing market. This past week has provided a wealth of data that paints a complex picture of our current economic landscape. Let’s dive into the details.
Labor Market Insights
The Bureau of Labor Statistics (BLS) reported that 142,000 jobs were created in August, falling short of the expected 160,000. This shortfall is compounded by the BLS’s downward revision of June and July job numbers by 86,000, following a significant 818,000 downward revision for the year reported a few weeks ago.
Interestingly, while part-time employment rose by 527,000, full-time employment fell by 438,000. This shift contributed to a drop in the unemployment rate from 4.3% to 4.2%, as the data includes those working part-time due to the inability to find full-time positions.
The JOLTS report further highlighted the labor market’s challenges, with job openings falling to 7.7 million in July, a 13% decrease from last year. The hiring rate rose slightly to 3.5%, but it remains near its lowest level since 2013, excluding the COVID-19 period. The quit rate also remained low at 2.1%, indicating less job poaching and a lack of confidence among workers in finding new employment opportunities.
Additionally, initial jobless claims fell by 5,000 last week, and continuing claims decreased by 22,000. However, this drop is likely influenced by the Labor Day holiday, which often delays filings.
Housing Market Update
On the housing front, ICE (formerly known as Black Knight) reported that national home values rose by 0.2% in July after seasonal adjustment. This brings home prices to 3.6% higher than a year ago, although this is a slight decrease from the previous report’s 4.1% annual increase.
Looking Ahead: The Fed’s Next Move
This week is pivotal as we anticipate the Federal Reserve’s meeting on September 18th. The consensus is that the Fed will lower the Fed Funds Rate, but the extent of the cut—whether a quarter or half a percent—will depend heavily on this week’s data. Key indicators to watch include the CPI and PPI inflation reports, along with the weekly initial and continuing jobless claims.
What This Means for Homebuyers
For potential homebuyers, the slowing labor market and rising home values present a mixed bag. On one hand, a potential rate cut by the Fed could lead to lower mortgage rates, making home loans more affordable. On the other hand, the increase in home values means that the cost of purchasing a home continues to rise.
As always, it’s essential to stay informed and work closely with your loan officer to navigate these economic shifts. Whether you’re looking to buy your first home or refinance an existing mortgage, understanding these trends can help you make more informed decisions.
Feel free to reach out if you have any questions or need personalized advice. Stay tuned for more updates as we continue to monitor these developments.
John Lamberg
Senior Loan Officer
Mobile 727.366.9947
Website ccm.com/john-lamberg
Email [email protected]
