The net monthly job addition averaged 116,000 from 3 months to August. That is light. It even suggests the possibility of turning net negative in the upcoming months if the economy hits an unexpected speed bump. The softening job figures suggest that the Federal Reserve will cut interest rates in mid-September, again on the day after the election, and possibly four more times in 2025. The long-term bond and mortgage markets have already incorporated these upcoming changes. That is why the average mortgage rate is 6.3%, measurably lower than the 7% to 8% seen in the past 18 months. Mortgages with full government guarantees, like FHA and VA loans, are already below 6%.
Historically, outside of the Great Recession in 2008-2010, which was led by a housing market downfall, the weakening job market does not negatively affect home sales or prices if accompanied by falling interest rates. With the unemployment rate at 4.2% in August, over 90% are employed, and around 70% consider themselves to be in a secure job. Therefore, falling mortgage rates exert more power than a weakening job situation. Let's see if that holds again.
" data-src="https://cdn.nar.realtor/sites/default/files/styles/inline_paragraph_image/public/economists-outlook-total-payroll-jobs-january-2020-to-september-2024-bar-graph-09-06-2024-1280w-720h.png?itok=684GA9TT" class="b-lazy" width="1200" height="675" alt="Bar graph: Total Payroll Jobs, January 2020 to September 2024" title="Bar graph: Total Payroll Jobs, January 2020 to September 2024">
" data-src="https://cdn.nar.realtor/sites/default/files/styles/inline_paragraph_image/public/economists-outlook-monthly-net-payroll-job-additions-january-2022-to-august-2024-bar-graph-09-06-2024-1280w-720h.png?itok=tjcOrnhk" class="b-lazy" width="1200" height="675" alt="Bar graph: Monthly Net Payroll Job Additions, January 2022 to August 2024" title="Bar graph: Monthly Net Payroll Job Additions, January 2022 to August 2024">
" data-src="https://cdn.nar.realtor/sites/default/files/styles/inline_paragraph_image/public/economists-outlook-unemployment-rate-january-2020-to-september-2024-line-graph-09-06-2024-1280w-720h.png?itok=2PoFgAPV" class="b-lazy" width="1200" height="675" alt="Line graph: Unemployment Rate, January 2020 to September 2024" title="Line graph: Unemployment Rate, January 2020 to September 2024">
" data-src="https://cdn.nar.realtor/sites/default/files/styles/inline_paragraph_image/public/economists-outlook-federal-funds-rate-and-mortgage-rate-january-2019-to-january-2026-line-graph-09-06-2024-1280w-720h.png?itok=CfsCay51" class="b-lazy" width="1200" height="675" alt="Line graph: Federal Funds Rate and Mortgage Rate, January 2019 to January 2026" title="Line graph: Federal Funds Rate and Mortgage Rate, January 2019 to January 2026">
" data-src="https://cdn.nar.realtor/sites/default/files/styles/inline_paragraph_image/public/economists-outlook-total-payroll-jobs-in-arizona-january-2000-to-january-2024-line-graph-09-06-2024-1280w-720h.png?itok=goL3X_Wx" class="b-lazy" width="1200" height="675" alt="Line graph: Total Payroll Jobs in Arizona, January 2000 to January 2024" title="Line graph: Total Payroll Jobs in Arizona, January 2000 to January 2024">
" data-src="https://cdn.nar.realtor/sites/default/files/styles/inline_paragraph_image/public/economists-outlook-payroll-jobs-in-michigan-january-2000-to-january-2024-line-graph-09-06-2024-1280w-720h.png?itok=2llLXWmZ" class="b-lazy" width="1200" height="675" alt="Line graph: Payroll Jobs in Michigan, January 2000 to January 2024" title="Line graph: Payroll Jobs in Michigan, January 2000 to January 2024">