The following is NAR Chief Economist Lawrence Yun’s reaction to this morning’s U.S Bureau of Labor Statistics’ (BLS) January jobs report:
“Job growth is critical in a rising interest rate environment. Every 10 basis point rise in mortgage rates can shave off approximately 35,000 in home sales annually. That is why today’s solid job addition of 227,000 is very comforting.
The low unemployment rate is putting some movement to wages, which rose 2.5%. It is hoped that home values do not outpace income growth this and upcoming years to keep housing reasonably affordable.
One thing of note is the solid increase of 36,000 in construction jobs. With 170,000 construction jobs added over the last 12 months, builders are increasing capacity, which should translate into continued home building. This is necessary to help increase the low housing inventory in much of the country.”