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What next for the housing market after latest US jobs revisions?

Journalist: John Choong (Head of Markets and Research), Newspage

ended 21. August 2024

The latest US job market data has revealed a significant downward revision to non-farm payrolls, with 818,000 fewer jobs created in the year to March 2024 than initially reported. This marks the largest revision in 15 years, indicating the labor market has been cooling faster than expected.

While the revision was larger than most analysts anticipated, the silver lining is that government job numbers were revised upwards by 1 million. As a result, markets are still pricing in a 25 basis point rate cut by the Federal Reserve in September, with expectations of a total of 100 basis points worth of cuts for the remainder of 2024.

A few Qs:

  1. How might the prospect of upcoming Federal Reserve rate cuts impact mortgage interest rates?
  2. Could this impact housing demand in the UK?
  3. What other economic factors, beyond US job market data, should UK mortgage brokers be monitoring to gauge the outlook for the domestic mortgage landscape?

1 responses from the Newspage community

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Editor
Michelle Lawson
Director at Lawson Financial
Normally the UK mirrors events across the pond however the Bank of England braved it and cut rates on 1st August before the Fed. Markets will be pricing this in but after Threadneedle Street has stood alone now, they may well continue. I think we are on the edge of a change in markets, with mortgage rate wars raging in the UK and creating confidence across the housing sector.