December 6, 2022
by: Aimee Hartwig Real Estate
The Bureau of Labor Statistics released the November jobs report This Week in Real Estate that far exceeded economists’ expectations. For nearly nine months, the Federal Reserve has relentlessly raised its benchmark interest rate in an effort to slow the U.S. job market and bring inflation under control. And for just as long, the job market has not seemed to get the message. The November employment report that was issued on Friday was no exception. It has proven surprisingly resilient in the face of the Fed’s anti-inflation campaign. Employers added 263,000 jobs and the unemployment rate remained at 3.7%, barely above the half-century low of 3.5%. In the Federal Reserve’s eighth and final meeting of 2022 scheduled for December 13 and 14, it is expected to raise the benchmark interest rate by another 50 basis points or 0.5 percentage point. That would represent the seventh rate increase this year, but the smallest increase of the previous four that were 75 basis points each. While the benchmark rate does not directly impact mortgage interest rates, the bond market does react to the tactics and strategies implemented to curb inflation and the bond market directly influences mortgage interest rates.
“Rates are still more than double those of a year ago,” cautions, but if inflation continues to slow down, rates may stabilize near 6%.”
Nadia Evangelou, senior economist and director of forecasting for the National Association of REALTORS®.
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