Economists' Outlook

Housing stats and analysis from NAR's research experts.

Instant Reaction: Jobs, November 3, 2023

The Federal Reserve will be pivoting from raising interest rates to current neutral to eventually cutting interest rates next year. The job market has slowed measurably. The latest monthly job gains of 150,000 in October are one of the weakest in the past three years. The unemployment rate rose to 3.9%, close to a two-year high. Wage gains also slowed to 4.1%, compared to nearly 6% last year, which will lower inflationary pressures.

The bond market is reacting as if the Fed will be cutting rates in 2024. The key benchmark 10-year Treasury yield slid down to 4.55% and is below a recent high of 5%. That means mortgage rates will be coming down. The 30-year fixed rate will stick in the 7% range for this year but looks to move down into the 6% range by the spring of next year. Moreover, if the spread between Treasury and mortgage were to move from the current abnormal high to just the historical average, the mortgage rates today would already be in the 6.2% to 6.7% range. Be ready for more home buyers and more home sellers.

Bar graph: Total payroll jobs, January 2020 through October 2023
Bar graph: Monthly job gains, January 2021 to October 2023
Line graph: Unemployment rate, January 2021 to October 2023
Line graph: Wage growth January 2021 through October 2023
Bar graph: 10-year treasury yield, January 2021 through October 2023 plus mid-2024 forecast
U.S. map: Job gains percent change from March 2020 to September 2023