Might mortgage rates actually be headed for a dip? The September jobs report, released Friday, showed U.S. employers added 29,000 jobs, a pace two housing economists said could lower mortgage rates after a month of increases.
The unemployment rate was 4.2 percent, compared with 4.1 percent in August, the Bureau of Labor Statistics reported Friday. The agency described both measures as little changed.
Lawrence Yun | Credit: AJ Canaria Creative Services
“Mortgage rates could see slight relief after brutal rises over the past month,” Lawrence Yun, chief economist at the National Association of Realtors, said in a statement. “That’s because the job market will not exert upward inflationary pressure and oil prices have retreated somewhat.”
Yun said the report indicates the economy “is not nearing a recession but also not overheating.” He attributed the higher unemployment rate to more Americans searching for a job. The labor force, which counts people working or looking for work, grew by 485,000 in September, according to the BLS.
Mortgage rates have climbed from about 6.5 percent in July to close to 7.3 percent, according to Sam Williamson, senior economist at First American. He said the report makes it easier for the Federal Reserve to leave its benchmark rate unchanged in October after raising it in September.
“September’s softer hiring may offer homebuyers some much-needed relief on mortgage rates, but that relief comes with a catch,” Williamson said in a statement. “Lower borrowing costs improve purchasing power, while slower hiring limits the confidence and life events that drive home sales.”
Williamson said the combination can steady the housing market and is unlikely to produce a broad rebound for now.
By the numbers
- 29,000: Jobs added in September, below the 45,000 monthly average of the prior 12 months
- 3 percent: Wage growth over the past 12 months, with average private-sector hourly earnings at $37.81
- 11,000: Construction jobs added, compared with a 12-month average of 10,000 per month
- 7,000: Financial activities jobs lost
The BLS will publish October data Nov. 6.
