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Housing Market reacts to 4.8 Million New Jobs in June
In a big surprise this week, U.S. employers added a much-larger-than-expected 4.8 million workers to payrolls last month. According to data from the Bureau of Labor Statistics, the U.S. unemployment rate also fell to 11.1 percent.
Market reaction was swift from U.S. housing industry association experts on the surge in job creation in June 2020.
NAR Chief Economist Lawrence Yun commented on the June job number with the following; “The country is undergoing extraordinary times and extraordinary movement is happening in the jobs data. The near 5 million job additions in a single month in June is off-the-chart the best ever by a wide margin and comes on top of 2.7 million job gains in the prior month. However, much more needs to occur to overcome the 20 million job losses in April.”
Yun continues, “Movement in the right direction is very encouraging, nevertheless the housing market is clearly in a V-shaped recovery and more home construction jobs need to be added. Commercial real estate, however, will lag far behind, especially for office and retail sectors.”
The Mortgage Bankers Association’s chief Economist Mike Fratantoni also commented, “The job market recovered at a much faster than anticipated pace in June, with strong job growth and a surprisingly large drop in the unemployment rate. 7.5 million people returned to work in May and June following a temporary layoff, which is quite a rebound. However, there are still 10.6 million people with this status, and the longer they remain out of work, the greater the risk that their situation becomes permanent. We are also continuing to see a very high level of new layoffs, with 1.4 million initial claims for unemployment insurance last week.”
“The job gains in June were very broad-based: manufacturing, construction, professional services, retail trade, leisure and hospitality, and health care all saw large gains.
“This report is nothing but positive for the housing and mortgage markets. The stronger job market will support new home purchases, as well as helping homeowners make their mortgage payments. MBA continues to believe that Congress needs to extend enhanced unemployment insurance benefits to support those households that remain unemployed.
“Although this surprisingly strong report will put some upward pressure on interest rates, we do not expect it will change the Fed’s commitment to keep rates at zero for the foreseeable future.”
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