May 12, 2026 – Parsing The Jobs Data

Economic Commentary

For those of you who are technology buffs, the task of parsing data is a familiar process.  For us laymen, it is a bunch of gobbledygook. This, we would like to introduce parsing for those who technology adverse. In this case we are taking data provided by the government and trying to make sense of that data.  Previously, we have discussed the economy moving from adding close to 200,000 jobs per month to a small percentage of this number for the past year.  Ordinarily, this would be a warning sign of a recession. More than a warning sign, it would be lights flashing red.

Yet even though economic growth has slowed, we seem to be chugging along without slipping into negative growth.  For the fourth quarter of 2025, the economy grew at a rate of 0.2%, or 0.7% on an annual basis.  We recently received the preliminary estimate of economic growth for the first quarter of 2026, which came in at 2.0%.  Again, slow growth but not a recession.  Most analysts are attributing this phenomenon to slowing population growth which is due to lagging birth rates but also influenced greatly by reduced legal immigration and the deportation of illegal immigrants as well.

Moving to the jobs numbers, in April the economy added 115,000 jobs and the unemployment rate remained at 4.3%. The previous two months of jobs data were revised downward by 16,000 jobs. In addition, wage growth expanded by 0.2% on a monthly basis and 3.6% annually. How can we parse this data to understand what is happening to the economy?  We believe that we are entering the Twilight Zone of economic data. Somewhere that no one has tread before.  It is not a recession. But it is not robust economic growth either. It is somewhere within another dimension. Pretty clear now – right? 

Weekly Interest Rate Overview

The Markets. Mortgage rates increased for the second straight week, though they eased a bit toward the end of the week as optimism grew for an Iran solution. According to the Freddie Mac weekly survey, 30-year fixed rates rose to 6.37% last week from 6.30% the previous week. In addition, 15-year loans increased to 5.72%. A year ago, 30-year fixed rates averaged 6.76%, 0.39% higher than today. Attributed to Freddie Mac: “Recent data points to slightly better conditions for buyers with a boost in new-home sales, median new-home prices being down to their lowest level since July 2021, and higher inventory than in recent years. Together, these trends could modestly ease affordability pressures through the 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

Adults ages 61 to 79 continue to dominate the housing market, making up the largest group of home buyers and sellers, according to the National Association of REALTORS®’ newly released 2026 Home Buyers and Sellers Generational Trends report. NAR reports 88% percent of all buyers purchased their homes through a real estate agent, while 91% of sellers worked with an agent. Last year, baby boomers overtook millennials—the largest U.S. population—to become the biggest force of home buyers and sellers, proving to be a powerful backbone to the housing market. Their soaring home equity from decades of ownership may be freeing them to be more agile than other age groups who are struggling to afford higher home prices. Baby boomers accounted for 42% of buyers and 55% of all home sellers—the highest of any other age group, according to NAR’s 2026 report. “The housing market remains sharply divided between homeowners with equity and first-time buyers trying to break in—many of whom are younger millennials,” says Jessica Lautz, NAR’s deputy chief economist. “For many younger households, affordability challenges and limited inventory are still making homeownership difficult to achieve.”  First-time buyers have fallen to their lowest share on record, comprising 21% of buyers over the last year, according to NAR’s records dating back to 1981. That said, Lautz recently said that there may be openings gradually arising for more first-time buyers to get into the market. In March, they accounted for 32% of recent buyers, according to the March 2026 REALTORS® Confidence Index survey.  Source: NAR

While many of the latest conversations around the U.S. real estate market have focused on affordability and interest rates, one segment continues to move forward: foreign investors. While domestic buyers remain more cautious, investors from abroad are driving much of the transaction volume in many U.S. markets. One reason is that foreign buyers view risk, financing and timing differently. Perhaps the most important difference between the two is the role of interest rates. International investors are often less affected by interest rate fluctuations than domestic investors. One reason is that some of those investors purchase properties with cash, and those who do take out loans typically view U.S. mortgage rates as more attractive than those in their home country. Additionally, financing options might look very different in other countries. First, many international investors are used to adjustable-rate mortgages, but with a fixed-rate mortgage in the U.S., they might prefer to lock in a consistent payment so they can more easily predict cash flow. In addition, unique loan products like DSCR and other non-QM loans enable scalability for investors, including foreign nationals. Would-be purchasers may qualify for these types of loans based on a property’s ability to generate cash flow, not based on the borrower’s personal finances or U.S.-based income. On top of that, there is no formal limit on the number of DSCR loans someone can secure, enabling investors to scale and build their portfolios. Changes in currency also impact how global investors see the U.S. market. When the U.S. dollar weakens, foreign currencies can go further when used in the U.S. real estate market.  Finally, foreign investors think in longer time horizons than domestic homebuyers. They view U.S. real estate as one of the world’s greatest wealth preservers and growth vehicles. Over a sufficiently long horizon, U.S. real estate has trended upward.  Source: HousingWire

Despite a recent softening in rents for new leases, rental housing remains unaffordable for many households, according to a new report by the Joint Center for Housing Studies of Harvard University. America’s Rental Housing 2026 noted that after record rent increases during the pandemic, national rent growth hovered near zero from mid-2023 into 2025. By the fourth quarter of 2025, asking rents for professionally managed apartments declined 0.6% year over year, with the majority of large markets seeing either small declines or only modest growth. Vacancy rates ticked up to 5.2%, matching their level a year earlier as rental demand slowed faster than new supply came online. But headline numbers showing flat or falling rents can be misleading, said Chris Herbert, managing director of the Joint Center for Housing Studies. “For millions of renters, especially those with lower and moderate incomes, housing is deeply unaffordable,” he said. “Years of rent increases and the loss of lower-cost units have left many households with no cushion and very few options.”  Multifamily construction remains elevated by historical standards but has retreated from recent peaks. Developers started 416,000 multifamily units last year; well below the three-decade high reached in 2022 but still above pre-pandemic norms.  “Rising construction and labor costs have contributed to this pullback,” the report said. Between January 2020 and December 2025, the prices of material inputs to new residential construction rose 42%, while employment costs for construction workers climbed 24%.  A record level of renters are cost burdened. In 2024, 22.7 million renter households spent more than 30% of their income on rent and utilities—49% of all renters. Some 12.1 million of these households were severely cost burdened, paying more than half their income for housing. Cost burdens have risen in 44 states and 88 of the 100 largest metro areas over the past five years and are increasingly affecting middle-income renters.  Source: Joint Center for Housing Studies of Harvard University