US Housing & Mortgage Markets
The labor market has stopped deteriorating — but it hasn't started helping. For housing, that distinction is doing real work right now: rates are lower than a year ago, inventory is rising, and demand still isn't responding.
A Jobs Report That Gives the Fed Nowhere to Go
Mohtashami and Olsen covered the same April payroll release from different angles, and together they tell a nuanced story. The headline: 115,000 nonfarm payrolls added, unemployment unchanged at 4.3%. Mohtashami reads this as unambiguously stabilizing — job creation has improved from 2025's historic lows, jobless claims remain low, and openings are holding. His takeaway is political as much as economic: Fed hawks now have cover to sit on their hands, and incoming chair Kevin Warsh will face a fractious FOMC populated by dissenters who only backed last year's cuts because the labor data was softening.
Olsen's read is more granular and more cautious. Peel back the headline and the internals are soft: 3-month average payroll growth is just 48,000 jobs/month — barely enough to hold unemployment steady. February was revised down 23,000 (to -156,000); revisions netted a 16,000 downward adjustment across the prior two months. The sector picture is narrow — health care (+37K), transportation (+30K), and retail (+22K) did the lifting, while construction, manufacturing, financials, and professional services were all roughly flat. Federal government payrolls fell another 9,000 in April and are now down 348,000 — 11.5% — since their October 2024 peak. Average hourly earnings rose 3.6% year-over-year, but real disposable income is essentially flat.
The sharpest signal in Olsen's read: involuntary part-time employment jumped 445,000 to 4.9 million — workers who want full-time jobs but can't get them, or who had hours cut. The unemployment rate held; job quality didn't. Where Mohtashami sees a floor, Olsen sees a ceiling. Both are right.
Inventory Keeps Climbing, But the Pace Is Softening
McBride's early April local market data offers the first look ahead of Monday's NAR release (consensus: 4.05 million SAAR, up from 3.98 million in March). In the early-reporting markets he tracks, active inventory was up 7.0% year-over-year in April — still a meaningful gain, but a deceleration from the 9.1% YoY pace logged in March for the same markets. New listings rose 2.5% YoY (vs. 2.1% in March), so supply continues to build, just less aggressively.
Importantly, some of these Northeast markets — where inventory remains sharply below 2019 levels — haven't reported yet, which introduces an upward bias in the regional aggregate. The full picture will look tighter once they're included. The Sunbelt and Western markets showing inventory above 2019 are skewing the current read more comfortable than the national reality.
Lower Rates, Unmoved Demand
Here's the puzzle that McBride's sales data and Olsen's Zillow read both illuminate: April closed sales in McBride's early markets are up just 0.5% YoY, a sharp deceleration from the 3.9% YoY pace in March. That's despite mortgage rates averaging 6.05% in February and 6.18% in March — the months those contracts were signed — which Olsen notes is roughly 40 basis points below where rates sat a year ago.
Cheaper financing should move demand. It isn't. Olsen's explanation is structural: housing decisions aren't made on rates alone. Households need confidence in job security, income trajectory, and their financial position — and April's report offers little on any of those fronts. With involuntary part-time spiking and real income flat, the affordability math has improved on paper but the behavioral response hasn't followed. The rate relief is real; the demand it was supposed to unlock is not materializing at scale.
What to Watch Monday
The NAR's April existing home sales print (May 11) will incorporate more markets than McBride's early read. Given equal working days YoY (22 both April 2025 and April 2026), the headline SA number won't get a calendar tailwind — what you see in NSA will roughly reflect in SA. The early data implies roughly flat YoY. Any meaningful upside would suggest demand is more resilient than the early reporters indicate; any miss would confirm that rate relief alone isn't clearing the affordability and confidence barrier.
TL;DR - Rates and Fed: April's jobs report (115K added, 4.3% unemployment) stabilizes the labor picture but gives Fed hawks justification to hold; Warsh's FOMC will be contentious on the path to further cuts - Inventory: Active listings up 7.0% YoY in early April markets, but the pace is decelerating from March's 9.1% — supply is building, slowly - Demand: Closed sales up only 0.5% YoY in early markets despite rates ~40bps below year-ago; Olsen's Zillow data confirms the pattern — affordability improved, confidence hasn't - Watch Monday: NAR April existing sales consensus is 4.05M SAAR; early data implies roughly flat YoY, with Northeast inventory dynamics the wildcard
Compiled from 3 sources · 3 items
- Bill McBride (1)
- Logan Mohtashami (1)
- Skylar Olsen (1)