The following is NAR Chief Economist Lawrence Yun’s reaction to this morning’s U.S. Bureau of Labor Statistics report on January employment conditions:
“The best news from the January jobs report is accelerating wages, which rose 2.9% from a year ago. The continuing job growth of 200,000 in January, and 2.1 million over the past 12 months, have kept the economy at essentially full employment. It is now to the point where employers have to offer higher wages to attract new employees.
Not all is fine, however. The labor force participation rate is still stuck at 62%, compared to 67% a decade ago, prior to the big recession. Also, the tightening labor market along with faster wage gains means that the Federal Reserve is inclined to raise interest rates more frequently.
Ultimately, the desire to buy a home will rise because of this strong job growth with higher pay, but the financial capacity to buy will be cut because of rising interest rates.”
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