Jobs report encouraging, but consumers remain pessimistic
April employment numbers were better than expected, but for buyers and sellers, “positive momentum matters more than any single month of data,” economists say.
The latest jobs report suggests that the labor market remains resilient amid some difficult headwinds. Typically, that would be a good sign for the housing market — but it doesn't appear to be easing the minds of consumers.
The U.S. economy added 115,000 nonfarm jobs in April, according to the U.S. Bureau of Labor Statistics. That was well above the median forecast of 55,000 and included an upward revision for March, bumping that month's total from 178,000 to 185,000. The last time the BLS reported consecutive months with more than 100,000 job additions was in late 2024.
The unemployment rate remained unchanged at 4.3%, while wages rose 3.6% year-over-year.
'Positive momentum' needed for market shift: The combination of job growth and wages rising faster than home price appreciation is a net positive for housing — but the market remains fragile, according to Jake Krimmel, senior economist at Realtor.com.
"For buyers, sellers, and builders, that stabilization and positive momentum matters more than any single month of data. The next question is whether this trend holds and becomes something for consumers and the housing market to build on this summer," Krimmel said.
One potential downside of the stronger-than-expected jobs report is that it makes a short-term interest rate cut even less likely, leaving the Federal Reserve to focus on cooling inflation. Mortgage News Daily reported a slight improvement in the 30-year rate following the jobs report, putting it at 6.42%.
Consumers are still feeling pessimistic: Another factor influencing the housing market is whether consumers feel confident enough to make purchases. The preliminary consumer sentiment reading came in at 48.2 this month, according to the University of Michigan survey — the lowest level on record going back to 1952, driven by growing concerns about high prices.
The direction of prices overall will be key to what happens next in the housing market, according to Sam Williamson, senior economist at First American.
"If uncertainty eases, it could give the housing market another boost by supporting job mobility, household formation, and the confidence needed to move," Williamson said. "Until then, ongoing uncertainty and rate volatility are likely to keep buyers cautious, tempering the potential for a stronger market rebound."