Economists' Outlook

Housing stats and analysis from NAR's research experts.

Instant Reaction: Jobs, July 7, 2023

Jobs have been added continuously since the lifting of the lockdown, but the latest monthly net gain of 209,000 is the smallest in 2.5 years. There are 3.9 million more Americans receiving payroll checks now compared to the pre-pandemic highs of early 2020. The unemployment rate is still tight at 3.6%, but wage growth is moderating. Wages are no longer rising in the 5-6% range but at 4.35% in June. Workers' standard of living, however, is rising for the first time in two years, even with lower wage gains because consumer price inflation is a bit lower.

The weaker job market combined with decelerating wage growth and calming consumer price inflation are clear indications for the Federal Reserve to stop raising interest rates. The American dream of homeownership has been a challenge for younger adults. High mortgage rates, along with the lack of housing inventory, have been the main hindrance. More effort should be directed toward raising the housing supply by focusing on worker training in home building and lessening barriers to construction so that once interest rates decline, there will not be a resurgence of rapid home price growth.

Line graph: Federal Reserve Policy Fed Funds Rate and Impact to 30-Year Fixed Mortgage Rate, January 2019 to July 2023
Bar graph: Total payroll job, January 2020 to July 2023
Line graph: Inflation, January 2019 to May 2023
Line graph: Wage Growth, January 2019 to July 2023