Robust Employment Opportunities Drive Increased Demand Among Homebuyers

Despite affordability challenges and a scarcity of available homes, the spring housing market has displayed an unexpectedly high level of activity this year, as buyer demand continues to grow and strengthen.

Evidence of current buyer interest is evident in the increased showing traffic. The latest data from the ShowingTime Showing Index, which tracks the number of buyers actively visiting properties, clearly indicates a higher volume of people viewing homes compared to the period before the pandemic (refer to the graph below).

While the current level of buyer activity may not match the frenzied pace of the past couple of years, it remains highly active. The number of interested buyers exploring available homes is substantial and not far behind the intensity seen during that period.

However, what is driving such high buyer activity during a time when mortgage rates have risen compared to the previous year?

The Job Market Is Growing at a Stronger-Than-Expected Pace

Despite persistent high inflation, the Federal Reserve (the Fed) consistently raising the Federal Funds Rate, and widespread discussions about a potential recession in the media, the current strength of the job market might come as a surprise. Even more astonishing is the indication that the job market seems to be further strengthening (refer to the graph below).

On a monthly basis, the Bureau of Labor Statistics (BLS) provides updates on the number of new jobs added to the U.S. job market. As depicted in the above graph, April witnessed the creation of an additional 88,000 jobs compared to March. Notably, these April figures surpassed expert projections, serving as a strong indicator of a growing job market.

Unemployment Is at a Near All-Time Low

Despite expectations that the ongoing efforts of the Federal Reserve to combat inflation would lead to an increase in the low unemployment rate witnessed in the past few years, such an outcome has yet to materialize.

In fact, the outcome has been quite the opposite, as the unemployment rate has declined to an impressive 3.4%, reaching its lowest point in 50 years (refer to the graph below).

Given the significant number of individuals who are steadily employed and experiencing financial stability at present, they remain in a position to seriously contemplate purchasing a home.

What This Means for You

If you have intentions of selling your house this year, an active buyer market will be highly favorable for you. This is because there will be heightened interest in your property when you list it, particularly considering the current scarcity of available homes for sale.

To begin the process, your most valuable resource is a seasoned real estate agent. They can provide invaluable assistance in appropriately pricing your house, navigating the offers you receive, skillfully negotiating, and minimizing your stress and inconvenience.