Economists' Outlook

Housing stats and analysis from NAR's research experts.

Instant Reaction: Jobs, February 3, 2023

“Despite the announced layoffs in Big Tech, Wall Street, and the mortgage industry, total job gains have been more significant. In January, net new payroll job gains (those receiving steady W-2 statement salaries) totaled 517,000. Net job gains should continue because there are far more job openings than the number of unemployed searching for jobs. Even in the tech sector, those that have lost their jobs are reportedly finding new ones within 3 months with a comparable salary.

Job gains are always good. Home sales and jobs are related over the long term. That is why the South and the Rocky Mountain regions are seeing more robust home sales gains over the long haul due to faster job growth compared to the rest of the country. But over the short-term, mortgage rates matter more. Robust job data will raise the prospect of consumer price inflation and the need for a more aggressive monetary policy to rein in inflation. So just as mortgage rates were trending down towards 6%, there could be a temporary rise. Still, rents are expected to calm down due to active apartment construction. That will help lower the broader consumer price inflation and halt Fed rate increases by summer. Mortgage rates can then go below 6%.” 

Bar graph: Payroll Jobs, January 2020 to January 2023
Line graph: Unemployment rate, January 2019 to January 2023
Line graph: Wage Gain vs Consumer Price Gains January 2019 to January 2023
Line graph: Fed Funds Rate vs Mortgage Rate, Jan. 6, 2022 to Feb. 2, 2023