March 3, 2026 – Jobs on the Agenda Again

Economic Commentary

Unless there is another delay because of the previous government shutdowns, we will see another reading on the employment situation this Friday.  In January there was a surprise increase of 130,000 jobs – the first time the economy added over 100,000 jobs in a month since April of last year. While this number is encouraging, we caution reading too much into one report for two reasons.  First, one month does not make a trend. We would have to see a quarter of solid job gains in order to declare that the jobs machine on its way to recovery. For example, even though there were 130,000 jobs added in January, the previous year of gains were revised downward, mitigating the impact.

Secondly, we have obviously lowered our expectations. During the years 2023 and 2024, the economy added approximately 190,000 jobs per month.  During 2025, after the aforementioned revisions, the economy added approximately 15,000 jobs per month.  That is a precipitous drop, even considering the loss of over 300,000 Federal Government jobs.  In other words, an increase of 130,000 jobs in 2023 or 2024 would have been considered a weak report.  Thus, are left with two questions – will this level be sustained in 2025, and if so, will this be the new level of job growth going forward?

As a reminder, the employment sector was not only affected by the loss of government jobs but also lower levels of legal immigration. It will be interesting to see where we head in 2026 within the employment sector.  If January’s levels are sustained, the growth of jobs for 2026 would come in around 1.5 million, which most likely suffice considering the lower overall population growth.  On the other hand, as we stated, one month does not make a year.  Let’s hope this potential momentum continues with the report covering the employment situation for February.  If we get the numbers together in time for Friday’s release.

Weekly Interest Rate Overview

The Markets. Average mortgage rates moved to below 6.00% for the first time in over three years. According to the Freddie Mac weekly survey, 30-year fixed rates fell to 5.98% last week from 6.01% the previous week. In addition, 15-year loans also increased to 5.44%. A year ago, 30-year fixed rates averaged 6.76%, .78% higher than today. Attributed to Freddie Mac: “For the first time in three and a half years, the 30-year fixed-rate mortgage dropped into the 5% range, falling even lower than last week’s milestone. This rate, combined with the improving availability of homes for sale, is meaningful and will drive more potential buyers into the market for spring homebuying season.”  Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

Real Estate News

The latest homeownership rate rose to 65.7% in the last quarter of 2025, according to the Census’s Housing Vacancy Survey (HVS). Compared to the peak of 69.2% in 2004, the homeownership rate is currently 3.5 percentage points lower and remains below the 25-year average rate of 66.3%. It is also important to note that the fourth quarter’s data is accompanied with a higher level of uncertainty. Due to the government shutdown, the Census only collected data for the last two months of 2025.  Compared to the previous year, homeownership rates increased in two age groups. Among younger households, the homeownership rate for those under 35 increased 1.6 percentage points to 37.9% in the last quarter of 2025. This age group is particularly sensitive to mortgage rates and the inventory of entry-level homes. Homeownership rates for householders ages 55-64 inched up by 0.4 percentage points over the same time. Householders ages 45-54 experienced the largest drop, declining 1.5 percentage points from 71.0% to 69.5%. The 35-44 age group saw a 0.5 percentage point decrease, decreasing from 61.4% to 60.9%.  Homeownership rates for householders aged 65 years and over declined 0.5 percentage points from a year ago.  The national rental vacancy rate inched up to 7.2% for the fourth quarter of 2025, on a steadily increasing trend since 2023. Meanwhile, the homeowner vacancy rate stayed at 1.2%. The upticks in both homeowner and rental vacancy rate signal an increase in the existing home supply.  The housing stock-based HVS revealed that the number of total households increased to 133.7 million in the last quarter of 2025 from 132.2 million a year ago. This increase was driven by both owner and renter household growth. The number of renter households rose by 0.46 million, while owner-occupied households increased by around 1 million over the same period.  Source: National Association of Home Builders

Nearly half of homes for sale now come with a monthly HOA fee, according to a recent study of the U.S. housing market. Some 43.6 percent of listed homes have homeowners association (HOA) fees, with a median monthly cost of $135, the study, from Realtor.com, found. In some areas, the HOA was more than five times that amount, adding another financial stressor for average Americans. HOA fees, used to fund amenities, roads, and other services, were typically for condo buildings and new communities, but have been spreading. Roughly one-third (33.4%) of single-family homes now carry HOA fees, and that share is on the rise, the study noted.  Not only are more neighborhoods launching HOAs, but the fees are rising due to several factors, Realtor.com Senior Economist Joel Berner said in a statement.  “HOAs are no longer confined to condos or brand-new developments,” Berner said. “Rising insurance costs, stricter building safety standards and higher labor and material prices are pushing associations to raise dues, making monthly HOA fees a much more common – and more costly – feature of homeownership than they were even a few years ago.”  From 2019 to 2025, the median HOA fee increased from $108 to $135. The study found that median fees can be much higher in certain areas, especially those popular with retirees.  Source: The Independent

The “yes in my backyard” (YIMBY) movement, backed by supply-and-demand dynamics, offers a simple solution to the housing affordability crisis — just build more houses. But some analysts believe that increased supply may arrive through a separate, more inevitable channel. The baby boomer generation is the largest cohort of seniors in United States history. As they age out of homeownership, some have predicted that a “silver tsunami” of housing supply will cascade onto the market. Cotality’s analysis of the latest national deed records gives some support to this narrative. A new indicator of inheritance events shows that a record-breaking 340,000 homes were inherited in the 12 months ending in October 2025. This represents more than 7% of all property transfers, higher than the share for any previous year. Are we seeing the beginning of a demographically destined tsunami? Maybe. But Cotality’s analysis of the latest U.S. Census data indicates the wave may not be as big, or arrive as soon, as some hope. The current generation of seniors is staying in their homes longer than previous generations. More than 22% of homeowners born in 1938 left their homes between the ages of 65 and 75. But only 17% of homeowners born in 1946 left their homes during the same decade of life. If seniors opt to age in place rather than downsizing or moving in with children, their homes will arrive on the market later. If heirs choose to keep parents’ homes for their primary residences those properties may skip the open market entirely. Inheritance is likely to play an increasingly important role in the transfer of property in the U.S. going forward. While this will be a boon for beneficiaries, demographics alone are unlikely to significantly improve affordability in the near term. Source: Scotsman Guide