Instant Reaction: February Jobs Report

The following is NAR Chief Economist Lawrence Yun’s reaction to this morning’s U.S. Bureau of Labor Statistics release on employment conditions in February:

“The strong job growth assures at least three interest rates hikes by the Federal Reserve in 2018. Because of the low unemployment rate, further normalization in monetary policy should be expected in 2019 as well, meaning another three or four rate hikes next year. Mortgage rates will therefore rise and rise. That in itself hurts housing affordability. But factors that can help with affordability are more income to households (possibly a second income earner getting a job) and if home prices can finally moderate. For slower home price growth, more home construction is needed. Job openings in the construction industry remain at historic highs. It is now a matter of providing necessary skills to go into the industry.”