Strong growth in the labor market diminished the chances of a Federal Reserve interest rate cut later this month. The U.S. economy added 147,000 jobs in June, contrary to analyst expectations, and the unemployment rate fell to 4.1%. Following the jobs report, the probability of a rate cut in late July dropped from 24% to 5%. Consequently, mortgage rates are unlikely to decrease, affecting homebuyers already facing affordability challenges. High interest rates and the lack of market balance are keeping many potential buyers and sellers from participating in the housing market.
The U.S. economy added 147,000 jobs in June, beating analyst expectations, the Bureau of Labor Statistics reported. The unemployment rate fell slightly to 4.1%.
For housing demand to meaningfully rebound, affordability must improve-through both a more balanced market and wage growth that keeps up with living costs.
The strong June employment report will bolster Fed Chair Jerome Powell's case for taking a 'wait-and-see' approach before cutting rates.
The chances of a Fed rate cut in the next policy meeting in late July plunged to just 5% following the jobs report.
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