The Bureau of Labor Statistics reported This Week in Real Estate that the U.S. economy added 227,000 jobs in November, marking a significant rebound from October. Since January 2021, the U.S. job market has experienced 47 consecutive months of job growth, making it the third-longest period of employment expansion on record. In the first eleven months of 2024, 1,984,000 jobs were created, with over 8 million jobs added since March 2022, when the Federal Reserve initiated the first of eleven interest rate hikes of this cycle. The unemployment rate increased to 4.2% in November, indicating a softening labor market. According to CME Group’s FedWatch tool, financial markets are anticipating an approximately 89% probability of a quarter-percentage-point rate cut during the Federal Reserve’s meeting on December 17-18. Mortgage rates fell to their lowest level in over a month, leading to a fourth consecutive weekly increase in the purchase index, which reached its highest level since January 2024, according to the Mortgage Bankers Association. Average homeowner equity remains near a historical peak, exceeding $311,000. CoreLogic’s Homeowner Equity Report (HER) for the third quarter of 2024 indicates that U.S. homeowners with mortgages (approximately 62% of all properties) saw an increase in home equity by $425 billion since Q3 2023, bringing the total net homeowner equity to over $17.5 trillion in the third quarter of 2024. Below are key events from the first week of December impacting our business: U.S. ADDED A STRONG 227,000 JOBS IN NOVEMBER IN BOUNCE-BACK FROM OCTOBER SLOWDOWN. America’s job market rebounded in November, adding 227,000 workers in a solid recovery from the previous month, when the effects of strikes and hurricanes had sharply diminished employers’ payrolls. The government also revised up its estimate of job growth in September and October by a combined 56,000. Friday’s report from the Labor Department report showed that the unemployment rate ticked up from 4.1% in October to a still-low 4.2%. Hourly wages rose 0.4% from October to November and 4% from a year earlier – both solid figures and slightly higher than forecasters had expected. The November employment report provided the latest evidence that the U.S. job market remains durable even though it has lost significant momentum from the 2021-2023 hiring boom, when the economy was rebounding from the pandemic recession. The job market’s gradual slowdown is, in part, a result of the high interest rates the Federal Reserve engineered in its drive to tame inflation. The progress against inflation and the slowdown in hiring, which eases pressure on companies to raise wages and prices, led the Fed to cut its key rate in September and again last month. Another rate cut is expected to be announced when the Fed meets December 17-18. Read the full story here.HOMEBUYER DEMAND JUMPED 6%, INTEREST RATES FELL TO THE LOWEST LEVEL IN OVER A MONTH. Potential homebuyers are responding to lower mortgage rates and a higher supply of homes for sale. That fueled mortgage demand last week. Total mortgage application volume rose 2.8% compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) decreased to 6.69% from 6.86%. Applications for a mortgage to purchase a home jumped 6% for the week, the highest level since January. “The recent strength in purchase activity continues, supported by lower rates and higher inventory levels, which are giving prospective buyers more options compared to earlier in the year,” said Joel Kan, an MBA economist, in a release. Read the full story here.HOW MIGRATION IS DIVIDING THE HOUSING MARKET IN TWO. It can be tricky talking about the national housing market when different parts of the country have very different market dynamics. Nationally, home prices will finish 2024 with an increase of about 5% over the previous year, despite historically low home sales and that there are 27% more homes unsold on the market than there were last year at this time. When tracking housing inventory in 2024 and 2025, we noticed one big macroeconomic trend dividing the U.S. into two separate markets. What is that trend? It’s migration. We are talking about migration – Americans moving across the country. For years, Americans have been moving to the Sunbelt. From Chicago to Arizona and Texas, from New York to Florida. In the last two years, especially in 2024, they’ve stopped moving. Inventory has built dramatically in the South and – at the same time – the number of unsold homes available in the Midwest and Northeast are still very tight. There were 707,000 single-family homes on the market heading into the Thanksgiving weekend. That is roughly 27% more unsold homes on the market than last year at this time. This is right where we’ve been expecting inventory to end the year. There are now only 18% fewer homes unsold available on the market than in November of 2019. We’re almost back to the pre-pandemic levels of inventory. We expect unsold inventory to keep growing in 2025 – though not by 27% again. When we’re analyzing the supply of homes for sale in 2025, keep your eyes on this bifurcation. I expect that we see some loosening of this migration freeze next year. That will help inventory in the North to grow a bit and tighten up inventory in the South. Read the full story here.
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