Bureau of Labor Statistics released the same day. According to Freddie Mac's Primary Mortgage Market Survey, the average rate for a 30-year fixed rate mortgage (FRM) was 3.52% with an average 0.7 point, an increase of 0.03% from the previous week.
The strong jobs report from the Bureau of Labor Statistics showed that the U.S. economy added 266,000 new jobs in November. This marks the 10th consecutive month of job gains, the longest streak since the beginning of the financial crisis. While the unemployment rate remains at 3.5%, a 50-year low, wages have finally begun to rise, suggesting that the labor market is tightening and giving workers more bargaining power.
Rising wages coupled with low interest rates are likely to continue driving strong demand for housing. According to the National Association of Realtors, existing home sales rose 4.6% in October and with pending sales expected to remain strong, the stage is set for an active 2020 housing market.
In addition to the good news from the jobs report, mortgage rates were also supported by a stronger than expected ISM manufacturing index, which rose to a 15-month high. The ISM Manufacturing Index measures the health of the manufacturing sector and the latest reading indicates the sector is returning to pre-recession levels, signaling further economic growth ahead.
Despite the positive news, there are still some potential headwinds that could impact the housing market in the coming months. These include the ongoing trade war between the U.S. and China, the uncertainty surrounding the impeachment inquiry and Brexit.
Overall, the outlook for the U.S. housing market for 2020 looks promising. Mortgage rates remain near historic lows and, combined with the strong jobs report, are likely to bolster demand for housing. However, it’s important to keep an eye on potential headwinds, such as a possible trade war escalation and the outcome of the impeachment inquiry, which could put downward pressure on mortgage rates and reduce demand for housing.
The strong US Bureau of Labor Statistics jobs report released on Friday indicates an ongoing trend of positive economic growth, with the 10th consecutive month of job gains and wages finally beginning to rise. This has created a favorable environment for the housing market, with low interest rates and rising wages leading to increased demand. The positive news was further bolstered by better than expected readings on the ISM Manufacturing Index, suggesting the industry is returning to pre-recession levels.
However, there are still some potential headwinds that could have a negative impact on the housing market. These include escalating trade disputes between the U.S. and China, the ongoing impeachment inquiry and the uncertainty surrounding Brexit. Despite these risks, the outlook for the U.S. housing market in 2020 remains positive. With interest rates remaining low and a strong jobs report indicating wage increases, demand for housing is likely to stay strong.
This article was contributed on Dec 06, 2023
