Economists' Outlook

Housing stats and analysis from NAR's research experts.

Instant Reaction: Jobs, July 8, 2022

by NAR Chief Economist, Lawrence Yun

Mortgage rates took a breather this past week on the prospect of less aggressive Fed interest rate hikes in the upcoming months. Mortgage rates, however, will be higher next week as the job market continues to expand. Today’s data showed companies added 372,000 net new jobs in June. Since the lockdown, nearly 20 million jobs have been added and total jobs now essentially match the previously high job numbers seen right before the onset of the pandemic. The unemployment rate remains tight at 3.6%. Wages are up 5.1%.

Job creation is, of course, good. But it also means the direction of interest rates will be higher. Home sales have been coming down this year, back to pre-pandemic levels after the gangbuster performance of the past two years, due to a steep fall in housing affordability. Alleviating the housing shortage therefore will help with affordability. Disappointingly, however, construction jobs in building homes and apartments fell in the latest month. That means the housing shortage will linger and apartment rents will rise.

Total Payroll Jobs - Almost Back to Pre-Covid Days
Residential Construction & Contractor Jobs
Jobs Recovery Compared to Pre-Covid Days
Wage Growth Lagging Consumer Price Inflation
Home Prices Decelerating (blue), While Rents Are Accelerating (red)