Job Market Strength Drives Robust Buyer Activity in Real Estate
The current spring housing market has proven to be remarkably active, defying expectations. Despite the challenges of affordability and a limited inventory of homes for sale, buyer demand remains strong and continues to grow.
A clear indication of the presence of interested buyers is the increased showing traffic. According to data from the ShowingTime Showing Index, which measures the number of buyers actively touring homes, more people are out looking at homes compared to the pre-pandemic period (refer to the graph below).
source of data and graph: keeping current matters ® real estate blog and showing time
Although the level of activity may not match the frenzy of the past few years, it is not far from that pace. This signifies a considerable number of buyers exploring available homes at present.
The question arises as to why buyers are so active when mortgage rates are higher than they were just a year ago. The answer lies in the robust growth of the job market, which is outperforming expectations. Despite concerns about inflation, repeated increases in the Federal Funds Rate by the Federal Reserve, and media discussions of a potential recession, the current job market remains surprisingly strong and appears to be strengthening further (see graph below).
source of data and graph: keeping current matters ® real estate blog and BLS
Every month, the Bureau of Labor Statistics (BLS) reports the number of new jobs added to the U.S. job market. As depicted in the above graph, April witnessed the creation of 88,000 more jobs compared to March, surpassing expert projections. This solidifies the notion that the job market is experiencing growth.
Furthermore, the unemployment rate is at a near all-time low, defying predictions of an increase following the Fed's efforts to combat inflation. In fact, the rate has dropped to 3.4%, a 50-year low (refer to the graph below).
source of data and graph: keeping current matters ® real estate blog and BLS
With a substantial number of individuals stably employed and financially secure, the prospect of homeownership remains viable for many.
For those considering selling their houses this year, the presence of an active buyer market is undoubtedly welcome news. Putting your home on the market during a time of heightened buyer interest, particularly when housing inventory is low, is advantageous.
To initiate the selling process, your best course of action is to consult an experienced real estate agent. They can assist you in accurately pricing your house, navigating incoming offers, negotiating effectively, and minimizing stress and hassle.
In conclusion, there is currently a significant pool of buyers searching for a home that meets their needs. This is primarily due to the strength of the job market and the financial stability of many individuals. To take advantage of this market activity and list your house for sale, reach out to a trusted real estate agent.