What September’s Jobs Report Means for Rates and the Housing Market

The delayed September Jobs Report and Housing Market Update delivered a mix of stronger job growth and a rising unemployment rate, raising big questions about what the Federal Reserve may do next. At the same time, home sales and builder confidence are showing signs of improvement. Here’s a quick look at what’s happening in the economy and housing market.

In this update:

• Will the September Jobs Report Lead to a Fed Pause?
• Jobless Claims Continue to Signal Slower Hiring
• October Existing Home Sales Rise Again
• Home Builder Confidence Inches Higher

Will September’s Jobs Report Lead to a Fed Pause?

September job growth came in stronger than expected, with 119,000 jobs added compared to the 50,000 forecast. However, revisions to July and August lowered prior totals, leaving August with a net decline of 4,000 jobs. Combined with June’s 13,000-job loss, this marks the first back-to-back monthly declines since 2020.
The unemployment rate also edged up from 4.3% to 4.4%.

Why it matters:
This report was delayed due to the government shutdown, and the next full update (including unemployment data) won’t arrive until December 16, after the Federal Reserve’s next meeting on December 9-10.

The Fed has already cut the Federal Funds Rate in both September and October. But Chair Jerome Powell has warned that another cut in December is “not a foregone conclusion.” Meeting minutes and recent commentary show the Fed is divided.

The challenge?

• High inflation argues against cutting rates.
• Softening labor data argues for easing.

With no additional jobs report before the December meeting, the Fed may hesitate, leaving the outlook uncertain.

Quick refresher:
The Fed doesn’t set mortgage rates directly, but its rate decisions (combined with economic signals) strongly influence them.

Bottom line:
Mixed labor data + limited new information before the next Fed meeting = uncertainty around a December rate cut.

Jobless Claims Data Signals Slower Hiring

With the shutdown over, the BLS released several weeks of jobless claims data, and the trend remains steady.

• Initial Claims: Held between 220,000-235,000 throughout October and November.
• Continuing Claims: Stayed above 1.9 million, reaching 1.974 million most recently.

Bottom Line:
Initial claims remain relatively low, but persistently high continuing claims suggest people are taking longer to find new jobs, another sign of a cooling labor market.

October Existing Home Sales Rise Again

Existing home sales rose for the second month in a row in October:

• Up 1.2% from September
• Up 1.7% year over year
• Inventory dipped to 1.52 million units, still nearly 11% higher than last year

Because October closings reflect buyers who were shopping in August and September, this data only partially captures the recent drop in mortgage rates.

NAR Chief Economist Lawrence Yun noted that homebuyers continued to take advantage of easing rates, even during the shutdown.

Bottom Line:
With mortgage rates trending lower, upcoming reports may show even stronger buyer activity.

Home Builder Confidence Inches Higher

Builder sentiment ticked up in November:

• NAHB Housing Market Index: 38 (highest since April)
• Current sales: 41
• Buyer traffic: 26
• Expected future sales: 51 (still above the growth benchmark)

While the index remains below the 50 mark that signals expansion, this month’s reading exceeded expectations and reflects improving outlooks.

NAHB Chief Economist Robert Dietz noted that easing mortgage rates should support a modest increase in single-family construction next year.

Bottom line:
Confidence is still cautious but improving. Lower rates are helping affordability and may encourage more new construction.

The Bottom Line

• The September Jobs Report shows a mix of strength and softening, leaving the Fed’s December decision uncertain.
• Jobless claims point to a gradually cooling labor market.
• Home sales and builder confidence are beginning to benefit from improving mortgage rate trends.

Staying informed about these trends can help homebuyers, sellers, and homeowners make confident decisions as economic conditions continue to shift.

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