Strong jobs report is promising for housing market
Posted on Monday, November 9, 2015 at 1:40:26 PM
Any economist worried that U.S. jobs were stagnating can breath a deep sigh of relief - October was the best month for job growth in 2015. According to the Bureau of Labor Statistics' Employment Situation Summary, the economy added 271,000 jobs last month - far better than the 180,000 predicted - and unemployment dropped to 5 percent, down from 5.1 percent. Job gains were highest in professional and business services, retail trade, health care and construction.
The strong jobs report is far better than what was expected and promises good news for the housing market. Jonathan Smoke, the chief economist for Realtor.com, told Consumer Affairs that "The healthy strong employment results for the past two years created an uptick in household formation, which has driven increased demand for home purchases and rentals."
Although it now seems that the jobs numbers have given the Federal Reserve the green light to raise interest rates in December, Smoke contextualized the soon-to-rise residential financing rates as still some of the lowest in U.S. history, at around 4 percent. In 2006, at the peak of the housing bubble, the average mortgage rate was about 6 percent.