Saying September's jobs report was a total letdown would be a serious understatement. Expected to rise by 500,000 jobs, the Labor Department's non-farms payroll report for September shows that just 194,000 jobs were added. The unemployment rate did go down to 4.8% against the 5.1% forecast. Interestingly, government payrolls led the decline reporting a loss of 123,000. Wages have shown a steady increase over the last few months, however, with September's $.19 rise bringing the average hourly earnings to $30.85 for all employees. According to the report, "The data for recent months suggest that the rising demand for labor associated with the recovery from the pandemic may have put upward pressure on wages."

Private payrolls saw a very positive spike in September with ADP's payroll report showing 568,000 jobs added against the 425,000 expectation. While roles in leisure and hospitality led the way, it's important to note that manufacturing jobs posted solid gains, too. Goods producers posted a gain of 102,000 with manufacturing and construction adding 49,000 and 46,000 jobs respectively. That's hopefully good news for homebuilders who say they have been struggling to hire skilled labor which has been slowing down their effort to add housing inventory. 

Weekly jobless claims fell below expectations with claims totalling 326,000 for the week ending Oct. 2. The Labor Department's report coincided with the winding down of federal unemployment benefits. Continuing claims also posted a decline with 97,000 fewer people filing for at least two weeks of benefits. That total number now sits at 2.71 million Americans. 

The reason why the jobs report is such a big focus for the housing industry is that the Federal Reserve has been pointing to the labor situation as a linchpin for its eventual change in economic policy. Inflation has been running at or above the Fed's desired 2% threshold for some time, but without increased employment and addition of jobs, the Fed has been reluctant to give a set timeline for increasing the benchmark overnight lending rate from 0%. 

MORTGAGE RATES BELOW 3%

The average on a 30-year fixed-rate mortgage fell back below 3% this past week. Freddie Mac's data shows an average at 2.99% which carries with it both good and bad implications. For those who have waited to refinance, rates are still low enough to potentially make it worthwhile (remember to always consult your Movement loan officer in order to get the most accurate picture of your mortgage situation). The flip side is that rates are expected to rise as 2021 closes out which will likely increase competition for an already limited number of homes and likely continue to push home prices even higher. 

Something to keep in mind is that the Federal Housing Finance Authority (FHFA), which oversees government sponsored enterprises Fannie Mae and Freddie Mac, will announce the 2022 conforming loan limits in late November. If you look at the FHFA's home price index from Q2, the data which is used to determine the following year's conforming limit, it has increased by 12.83% year-over-year. If the FHFA used Q2 data to set the next conforming limit, that would push the limit to well over $600,000. Currently, the conforming loan limit is $548,250. The FHFA typically uses Q3 data to determine the increase.