Good morning, team! Is your spider sense tingling like mine?

A tide may be turning in the housing market sooner rather than later. The Fed started hiking rates in September 2021. Three years later, we are on the cusp of an annoucement of their first official rate CUT. That may be the catalyst necessary to propel the housing market into a new cycle, stimulating more home buying. Who’s ready?!

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Read time: ~4 minutes

Labor Market Adds Jobs, But Losing Steam 😬

On Friday, the September Non-Farm Payroll numbers were released showing a gain of 142K jobs vs. the estimates of 161K jobs. Unemployment dropped lower to 4.2%.

In the same report, June & July payroll numbers were revised down 61K and 25K respectively. This has become common practice over the last 18 months. Announce a blowout headline number followed by two months of revisions well below original estimates. Below is a chart of the first and second revisions by month since January 2023.

The 3-month average is 116K new jobs vs. the average in 2023 of 232K and the 2024 average of 207K.

We are experiencing a slowdown in the US labor market, fortunately we aren’t losing jobs…yet.

Additionally, there was a steep loss in full-time jobs vs. a pretty substantial gain in part-time jobs reported. Since June 2023, we have LOST approximately 1.5M full-time jobs. In the last year, we’ve lost 1M full-time jobs that have been replaced by 1M part-time jobs.

We are on the cusp of a reversal in Fed policy due to this slowdown in the labor market. The hope is that it ushers in a new cycle within the housing market, lead by lower interest rates. It will take time to bring in buyers from the sidelines as they continue to keep an eye on rates, home prices, the election, etc. The effects won’t happen over night.

While I tend to ignore mainstream media, the more they get ahold of the “lower rate” narrative, the more likely we see first timers get comfortable jumping back in and existing buyers possibly upgrading.

Key Takeaway: August was the second month with a sizable miss to payroll expectations. Additionally, very large revisions to data from prior months shows the US labor market is shaky. The Fed WILL cut rates on September 18th and that should be in precursor to a new cycle in the housing market with increased volume.

Rates @ 15 Month Low 🤩

Halleluiah 🙌 Rates have pulled back, especially since May of this year, as the market starts to anticipate the rate cuts by the Federal Reserve.

The current national average is 6.27%, as reported by Mortgage News Daily. The last time rates were this low was back in April of 2023. Its also a significant improvement from the peak of 8.03% in October of 2023.

So why aren’t buyers flooding back into the market on this news?

Some suspect a large contingency of buyers are waiting for the election to conclude before pulling the trigger.

There are others that suspect weaker areas of the economy, like jobs, could be discouraging buyers. If job stability is in jeopardy, buying a home is the last thing you should be considering.

Additionally, there are some that may be waiting for a continued pull-back in rates seeing this initial dip as just a precursor to much lower rates in the future…which may not materialize.

Key Takeaway: While we have a number of headwinds in the housing market, we are starting to get some relief from a few significant tailwinds. Lower rates, especially once social media and mainstream media get ahold of it, should start to permeate through to those buyers on the fence. But as I’ve mentioned before, it will take time before the effects are felt in the market.

Exclusive Interview with CEO of Compass, Robert Reffkin

The real estate world is going through MASSIVE change in 2024.

There is no better advocate for agents in this market than Robert Reffkin, the CEO of Compass.

On Friday, September 27th from 2 - 2:45PM EST, my friend and coach Tommy Choi will be interviewing Robert to seek out the answers as to how real estate agents can THRIVE in this new environment.

I’m giving you a ton of time to sign up. Make sure you click the link below to register. If you have trouble registering, reach out!

Register Now

This is a private, exclusive event that we’ve opened up to our Realtor partners and we’d love to see you there.