The U.S. housing market has stalled, and a slowdown in hiring could spell even more trouble for home buyers.
The economy lost 33,000 nonfarm payroll jobs â€” the first monthly decline in seven years, according to the Employment Situation Report for September 2017 from the U.S. Bureau of Labor Statistics.
In stark contrast to Septemberâ€™s numbers, the economy added 172,000 jobs per month in the past 12 months.
Whatâ€™s driving the lackluster performance? Hurricanes Irma and Harvey, which tanked hiring for food and drink service jobs in Texas and Florida, according to the report.
To add salt to the wound, nonfarm jobs in July were revised down to 138,000 from 189,000. August saw a minimal upward revision from 156,000 to 169,000.
However, employers added 38,000 less jobs in July and August than previously reported, the BLS reported.
Septemberâ€™s employment report wasnâ€™t all bad news.
Average hourly earnings for nonfarm employees rose by 12 cents to $26.55 â€” more than expected. In the past year, average hourly earnings climbed by 74 cents, or 2.9 percent.
But the wage growth isnâ€™t keeping pace with fast-rising home prices in many parts of the country.
The median existing-home price rose 5.6 percent in August to $253,500 over the previous year, according to the National Association of Realtors. It also marked the 66th straight month of year-over-year gains.
Construction jobs lost some ground in September despite strong gains for most of the year.
Home builders and remodelers lost 3,500 jobs in September, according to the BLS.
However, 80,600 construction jobs have been added over the last year, says Robert Dietz, chief economist with the National Association of Home Builders.
It's no secret that home builders are facing shortage of skilled labor and rising material costs.
Those issues are making it harder for builders to add much-needed inventory to the market.
A shortage of existing homes for sale in entry-level price ranges means home buyers need options. In other words, the demand for new homes is there.
But workforce is a key constraint for residential building growth, so expect a rocky road ahead as workers stay busy repairing storm-damaged communities, Dietz says.
â€śAffected storm areas represent about 14 percent of national home building activity,â€ť Dietz says. â€śWeâ€™ll see delays in single-family construction, with increased remodeling activity as housing repair work occurs.â€ť
In fact, the industry needs 10,000 to 20,000 more construction workers in hurricane-ravaged areas, Dietz points out.
Reeling from a lack of affordable starter homes and rising prices, buyers have another obstacle: a (potential) rise in mortgage rates.
Although rates are still near historic lows, theyâ€™ve been rocky in recent weeks.
As a result, mortgage applications for the week ending Sept. 29 fell 0.4 percent from the previous week, according to the Mortgage Bankers Association's Weekly Mortgage Applications Survey.
The Fed might raise rates in December, which could hike mortgage rates.
Fewer homes on the market and rising prices is the new reality. Knowing that, home buyers might want to lock in mortgage rates before they go up â€” if they can find the right home.
Worried about rising rates? It might be smart to lock in your rate now.
Every mortgage borrower needs aÂ rate lock in order to close. When you buy a home or refinance an existing home loan, make sure you get the best rate lock possible.
Keep in mind that your choice of rate lock can impact your closing costs, so get the details in writing.
Ask your lender how much youâ€™ll pay for your lock period. Also, the more you extend your lock period out, the more money youâ€™ll pay at closing.
Get today's live mortgage rates now. Your social security number is not required to get started, and all quotes come with access to your live mortgage credit scores.
The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.
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2017 Conforming, FHA, & VA Loan Limits
Mortgage loan limits for every U.S. county, as published by Fannie Mae & Freddie Mac, the Federal Housing Administration (FHA), and the Department of Veterans Affairs (VA)