Mortgage Market Update: Private Payrolls Show Modest Rebound and Home Price Outlook Strengthens
The latest economic reports brought a mix of reassurance and opportunity for homebuyers, homeowners, and anyone watching mortgage rates closely. After two months of job losses, the private sector finally showed signs of life in October. At the same time, home price forecasts continue to trend upward, reinforcing the long-term strength of real estate.
Below is a clear breakdown of what you need to know.
Private Sector Job Growth Returns, but Hiring Remains Soft
The private sector added 42,000 jobs in October, beating expectations of a 24,000 gain. This shift comes after losses in both August and September, although overall momentum is still slower compared to earlier in the year.
Breaking down the numbers:
Small businesses: lost 10,000 jobs
Medium-sized companies: lost 21,000 jobs
Large companies (500+ employees): added 73,000 jobs
Job growth remains uneven across industries. Only five out of ten major sectors expanded, with the strongest performance coming from trade, transportation, and utilities, which added 47,000 positions.
Wage trends also stayed consistent.
Workers who switched jobs saw 6.7 percent annual wage growth, while those who stayed in their roles saw 4.5 percent growth. Both figures match last month’s data, signaling that wage pressures have been relatively stable for more than a year.
Bottom line for the job market: Over the last three months combined, the private sector has added only 10,000 jobs. ADP Chief Economist Dr. Nela Richardson described October’s hiring as modest, adding that the rebound is not strong enough to signal a major shift in the labor market.
Why This Matters for Mortgage Rates
This month’s ADP report is especially important because the federal government’s official employment data is delayed due to the recent shutdown. With limited data, the Federal Reserve may rely more heavily on private reports like ADP’s when shaping monetary policy.
Fed Chair Jerome Powell recently emphasized that there is no risk-free path ahead for monetary policy and that a rate cut at the December 10 meeting is not guaranteed.
For now, October’s numbers do not push the Fed in either direction. Job growth was not strong enough to rule out future rate cuts, but not weak enough to make them urgent.
Quick refresher:
When the Fed adjusts the Federal Funds Rate, it affects short-term borrowing between banks. This does not directly set mortgage rates, but it does influence the overall interest rate environment and investor expectations.
Home Price Trends: A Slight Dip, but a Strong Long-Term Outlook
Cotality’s latest Home Price Insights report showed a small 0.2 percent price decline in September, yet values remain 1.2 percent higher than a year ago. This is only slightly lower than the 1.3 percent annual gain reported in August.
Despite the month-over-month dip, the outlook for home appreciation remains positive.
Cotality now projects 4.1 percent home price growth over the next 12 months, a slight increase from last month’s 3.9 percent forecast. This upward revision reflects expectations for:
Lower mortgage rates
A release of pent-up demand
Ongoing housing shortages in many markets
The takeaway: Real estate continues to be one of the most reliable wealth builders.
For example, a $500,000 home appreciating at 4 percent per year increases by $20,000 in value within 12 months.
This is the type of long-term equity gain that fuels financial security for many homeowners.
What This Means for Buyers and Sellers Today
The combination of stable wage growth, modest job creation, and strengthening home price forecasts creates a window of opportunity.
For buyers:
If mortgage rates begin easing in the coming months, today’s prices may look like a bargain in hindsight.
For sellers:
A positive price outlook supports home values, especially in markets where inventory remains tight.
For refinancing homeowners:
If rates drift lower, more borrowers could become refi eligible again.
Now is the ideal time to review your numbers so you can move quickly when rates shift.
Thinking About Buying or Refinancing? We Can Help
Market conditions are changing, and preparation is everything. Whether you are buying your first home, upgrading, or exploring a refinance, The Mortgage Gurus can guide you through every step.
Your mortgage strategy matters. Let us help you make a confident move.
