There is no national economic recession on the horizon. The net payroll job addition in September strengthened to 254,000 after adding much lighter job gains in the previous months. The annual wage gains also accelerated to 4.0% after softening to 3.6% just two months earlier. More jobs mean more real estate demand, from retail spaces to apartment leases. Home buying will also increase, provided the conditions are right, and more inventory choices and lower mortgage rates will help.
Even with the solid job figures, the Federal Reserve will continue to cut its short-term interest rates but with more caution. Mortgage rates, however, which are not controlled by the Fed, look to rise modestly and temporarily. This just reinforces the notion that trying to market-time the best mortgage rates can backfire.
One real estate sector that is not moving forward is the office market. Jobs in professional business service and financial activities have risen by more than 2 million compared to pre-COVID days. Yet, these typically office-using jobs are not taking on office spaces. Expect, therefore, a relatively stronger housing demand in the suburbs and in fun recreation destinations.
From NAR