Chief economist reacts to labor market report
The addition of 134,000 jobs in September and the reduction in the unemployment rate to 3.7% is good news for the housing market, despite coming in weaker than had been expected.
For homebuyers, a rise in average wage growth of almost 3%, helps to offset the rise in mortgage rates which has weakened affordability.
First American chief economist Mark Fleming calculates that an estimated 2.9% annual rise in household income makes a big difference to homebuying power.
“In September, consumer house-buying power declined by $28,000, 7.4%, compared to a year ago. If household income had not increased compared to a year ago, the increase in mortgage rates would have reduced consumer house-buying power by $38,000. Rising household income offset the impact of higher cost mortgages by $10,000,” he said.
The Bureau of Labor Statistics data also shows that there were 23,000 more construction workers in the month with a 315,000 increase over the past 12 months; although the stats do not break down how many of these are in home construction.
