Surprising Detail in March's Employment Numbers!

Weekly Mortgage Update 04/08/2024

Author

Michael Cassano
April 08, 2024

Hope everyone's weekend was fantastic, especially with the eclipse adding a celestial highlight to the beginning of the week. Let’s dive into this week’s roundup, packed with all you need to know from the mortgage and housing front as we embark on Q2 of 2024.

Read Time: ~3 minutes

Rates ended HIGHER compared to last week, and volatility was HIGH. Some products have pushed back over 7% which other are still in the high 6’s without paying discount points. Paying discount points can get you in the mid 6’s.

A Peek at the March Jobs Report

Last Friday brought us the March jobs report from the Bureau of Labor Statistics, and boy, did it turn some heads. The economy added a whopping 303,000 jobs, smashing the 200,000 prediction. Even more, the unemployment rate ticked down to 3.8% from 3.9%. The spread of job additions was broad, with healthcare, government, and construction leading the charge. Interestingly, despite the overall growth, manufacturing jobs didn't see an uptick.

Two details caught my eye within the report:

  1.  Revisions: February’s report took back 300k jobs from previous totals, but March unexpectedly threw in an extra 22k to Jan/Feb's numbers. While not offsetting past downward revisions, it's a curious twist.

  2.  Part-Time vs. Full Time Jobs: March saw a surge in part-time roles by 691,000 but a dip in full-time positions by 6,000. This shift towards more part-time work could signal changing dynamics in the job market.

Key Takeaway : The devil’s in the details with these job reports. Despite the impressive headline figures, nuanced shifts hint at underlying market dynamics. And with the beat on jobs and dip in unemployment, mortgage rates nudged up, aligning with growing skepticism around any Fed rate cuts this year.

Listings See a Light at the End of the Tunnel

March 2024’s active listings, as per Realtor.com, saw a significant jump to 694,820, a 23.5% increase from 2023 (562,444) and a stark contrast to March 2022's figures (354,016).

Despite this boost, we’re still trailing behind the pre-pandemic supply levels. March 2024 was down 37.7% to March 2019 when we had 1,115,940 homes for sale.

Key Takeaway: Tracking these active listing trends is crucial. An uptick in inventory might hint at a cooling market, potentially easing home prices. Conversely, a swift drop could signal a market heating up again.

The Older Generation's Housing Hold

Recent data from Redfin highlights a striking trend: over 78% of senior homeowners are choosing to age in place rather than relocate to senior living communities or with family. This preference plays a significant role in the tight housing supply we're facing.

Is it really surprising that many seniors are opting to stick to their current homes? The reasons are pretty straightforward. A lot of them have already paid off their mortgages, and those who haven't are sitting on rates that are enviable by today's standards. On top of that, the tax rules in numerous states tend to favor keeping things status quo, financially speaking. And let's not overlook the leaps in medical and tech advancements that are smoothing out the aging-in-place path.

Key Takeaway: This trend among older homeowners is keeping the housing supply scarce, pushing prices up, and challenging first-time and young buyers in securing a home.

What’s Brewing This Week

All eyes are on the upcoming March CPI data this Wednesday. It’s a critical figure that could sway market sentiments, with HEADLINE CPI forecasting to be 3.4%, which is up from last report of 3.2%. CORE CPI is expected to come in a little softer at 3.7% vs. previous 3.8%.