Private Payrolls Rebound and Home Prices Stay Strong: What It Means for You

After a slow stretch, private payrolls showed renewed growth in October, and the housing market continues to demonstrate stability. While economic uncertainty remains, both trends suggest steady footing heading into the next few months.

Let’s take a closer look at what’s driving these changes and what they could mean for you.

Private Sector Job Growth Rebounds, but Remains “Modest”

According to ADP, the private sector added 42,000 jobs in October, surpassing expectations of 24,000. That’s a welcome rebound after two months of job losses, though overall growth remains measured.

Here’s how it breaks down:

• Large companies (500+ employees) added 73,000 jobs.
• Small and medium-sized companies saw declines of 10,000 and 21,000 jobs, respectively.
• The trade, transportation, and utilities sector led the way with 47,000 new positions.

Wage growth stayed steady, with job switchers seeing a 6.7% annual increase and job stayers at 4.5%. ADP notes that pay growth has been “largely flat for more than a year,” reflecting a better balance between available jobs and workers.

Bottom line: The private sector had just added 10,000 jobs in total over the past three months. ADP Chief Economist Dr. Nela Richardson summed it up: “Private employers added jobs in October for the first time since July, but hiring was modest relative to what we reported earlier this year.”

Why It Matters for Interest Rates

Because the government’s official employment data was delayed by the recent federal shutdown, the Federal Reserve is relying more heavily on private reports like ADP’s.

Fed Chair Jerome Powell recently emphasized that there’s “no risk-free path” forward, suggesting that another rate cut in December “is not a foregone conclusion.”

For now, October’s job report likely won’t shift the Fed’s stance much, growth wasn’t strong enough to eliminate rate cuts, but not weak enough to require them either.

Quick refresher: The Federal Reserve’s interest rate decisions influence mortgage rates and other lending costs. While they don’t directly set mortgage rates, they play a major role in shaping financial markets and borrowing conditions.

Opportunities Remain in Housing

Cotality’s latest Home Price Insights report shows that home values slipped just 0.2% in September. Despite that small monthly decline, prices remain 1.2% higher than a year ago, showing continued stability in the housing market.

Looking ahead, Cotality expects home values to rise 4.1% over the next 12 months, up from a 3.9% forecast in their previous report. This improvement reflects growing optimism around lower mortgage rates and pent-up buyer demand.

Bottom line: Even modest appreciation can add up. For example, a $500,000 home gaining 4% in value would increase by $20,000 in just one year, a clear reminder of the long-term wealth potential of homeownership.

The Takeaway

Despite economic headwinds, both job growth and housing remain on relatively solid ground. For potential homebuyers, continued price stability and possible rate relief could create new opportunities.

At TEG Federal Credit Union, we’re here to help you make the most of those opportunities, whether you’re buying your first home, refinancing, or exploring your next move.

Connect with us today to discuss your goals and discover how TEG can help make them happen.

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