Powerful Job Market Fuels Homebuyer Demand - Spring 2023

The spring housing market of 2023 has proven to be unexpectedly vibrant, despite ongoing challenges in affordability and a dearth of homes on sale. The demand from homebuyers remains robust and appears to be gaining momentum.

One key indicator of this fervent buyer interest is the surge in showing traffic. The latest data from the ShowingTime Showing Index, a barometer for buyers' active exploration of homes, reveals a notable increase in people scouting homes, surpassing even the pre-pandemic levels (refer to graph below). While we are observing less frenzy compared to the last couple of years, the numbers aren't far off that pace. A considerable number of potential buyers are perusing available homes currently.

A question that naturally arises is why the market is buzzing with buyer activity at a time when mortgage rates are steeper than the previous year.

An Answer Lies in the Unanticipated Strength of the Job Market

In the face of persistent high inflation, multiple hikes in the Federal Funds Rate by the Federal Reserve (the Fed), and media conjecture about a potential recession, the resilience and growing strength of today's job market might come as a surprise (refer to graph below).

The Bureau of Labor Statistics (BLS) issues monthly reports indicating the addition of new jobs to the U.S. market. The graph above reveals an addition of 88,000 jobs in April over March. The April figures have surpassed expert predictions, indicating a burgeoning job market.

Unemployment Nearing Historical Lows

Contrary to the expectations of a rise in unemployment following the Fed's aggressive measures to combat inflation, we have witnessed a consistent decline in unemployment rates. The unemployment rate now stands at a meager 3.4% - a low not seen in the last 50 years (refer to graph below):

With a significant number of people maintaining stable employment and financial status, the dream of home ownership remains firmly within reach for many.

Implications for You

For those considering selling their homes this year, a market teeming with active buyers is a welcome scenario. A high demand against a low supply of homes means your property will likely receive increased interest once it hits the market.

To navigate this promising landscape, the guidance of an experienced real estate agent is invaluable. They can assist with correctly pricing your house, handling incoming offers, effective negotiations, and minimizing overall stress.

In Conclusion

Despite the scarcity of homes for sale, the market is brimming with buyers searching for a home to meet their needs. This can be largely attributed to a resilient job market, which has enabled many to maintain a steady income, making homeownership a viable option. If you're looking to capitalize on this active market, reach out to a trusted real estate agent today.