Solid Labor Market: Stable Conditions Offer Support for Buyers and Sellers

This week brought a full slate of major economic reports, including updates on inflation, job growth, and overall economic activity. While there were no major surprises, the data painted a mixed picture. Mortgage rates held steady and ended the week with little change.

Job Gains Beat Expectations Despite Revisions

The April Employment report showed that the economy added 177 thousand jobs, exceeding the forecast of 130 thousand. However, this positive news was tempered by downward revisions to prior months, which offset some of the monthly gains. The unemployment rate held steady at 4.2 percent. Wage growth was also unchanged, with average hourly earnings rising 3.8 percent compared to a year ago.For real estate, steady job growth and consistent wages provide a solid foundation for homebuyer confidence. Sellers may benefit from stable employment trends that support purchasing power, especially as mortgage rates remain level.

GDP Contracts as Imports Surge Ahead of Tariffs

Gross Domestic Product declined by 0.3 percent in the first quarter of 2025, falling short of expectations for modest growth and marking the first contraction since early 2022. The sharp drop was largely due to a 41 percent increase in imports, as businesses and consumers rushed to purchase goods ahead of new tariffs. These early purchases reduced domestic production figures, subtracting an estimated 5 percentage points from GDP. Slower consumer and government spending also contributed to the weaker results.For the housing market, short-term economic weakness could create caution among some buyers, but the anticipated rebound in future quarters may support renewed confidence. Sellers should remain aware that broader economic conditions can influence buyer urgency and expectations.

Inflation Shows Continued Progress

The Federal Reserve’s preferred inflation gauge, the Core Personal Consumption Expenditures price index, rose 2.6 percent in March from one year earlier. This was down from 3.0 percent in the previous month and marked the lowest reading since March 2021. Still, the Federal Reserve’s target of 2.0 percent remains elusive, and upcoming tariff effects could challenge future progress.For real estate, easing inflation typically supports more stable mortgage rates and helps preserve buyer affordability. However, the risk of rising costs from tariffs could impact both home prices and household budgets in the coming months. Buyers and sellers alike should monitor inflation trends closely.

What This Means for Real Estate

This week’s economic data showed strength in the labor market, weakness in short-term growth, and moderate progress on inflation. For buyers, a steady job market and improving inflation data offer reasons for optimism, particularly with mortgage rates holding firm. For sellers, stable demand and limited rate pressure make it a good time to engage serious buyers, though staying flexible in a shifting economy remains important.

Understanding how broader economic forces shape buyer behavior and affordability is essential in today’s market. Whether buying or selling, informed decisions lead to better results. Let me know if you would like this tailored for a specific audience or region.