The September jobs report pointed to a labor market that was losing momentum, while elevated borrowing costs continued to weigh on housing demand.
U.S. employers added just 29,000 jobs in September, falling well short of the 84,000 consensus forecast. Revisions to July and August also reduced previously reported payroll gains by roughly 60,000 jobs. The unemployment rate edged up to 4.2%, although layoffs remained relatively limited, suggesting the labor market continues to operate in a "low-hire, low-fire" environment.
The weaker employment picture may make an October Federal Reserve rate hike less likely, but it does not eliminate the possibility of another increase before year-end. Persistent inflation pressures, including higher energy costs and geopolitical uncertainty, continue to shape the Fed's approach. As a result, financial conditions remain tight, with the 10-year Treasury yield and mortgage rates continuing to put pressure on housing.
Freddie Mac's mortgage rate reached 7.28%, up 62 basis points from the beginning of September. At that level, the increase translates to roughly $19,000 less purchasing power for a buyer maintaining a $2,000 monthly principal-and-interest budget.
Housing activity is already reflecting that pressure. Pending home sales declined 4.1% year over year, the largest decline since March 2025, while 20.8% of listings received price cuts in September—the highest monthly share since October 2022.
For SFR, BTR, and multifamily stakeholders, the combination of slower employment growth, elevated financing costs, and softer buyer demand points to a housing market likely to remain constrained in the near term. Rather than a sharp shift in either direction, the market appears positioned for a period of slower transactions, greater price sensitivity, and continued pressure on affordability.
Source: Realtor.com Research
