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Latest jobs report a good sign for bonkers housing market

Unemployment rate drops to near pre-pandemic level in March

Maybe things are getting better? Coming off a month of strong growth in February, the U.S. jobs report released Friday again showed a solid increase in non-farm payroll jobs. A total of 431,000 non-farm payroll jobs were added in March, and employment in the construction industry is now above its pre-pandemic level, after the industry added 19,000 jobs.

The unemployment rate dropped 0.2 percentage points from February bringing to 3.6%. The unemployment rate is now just marginally higher than its February 2020 level of 3.5%.

“Approximately 93% of the jobs lost in the pandemic have been regained,” First American deputy chief economist Odeta Kushi said in a statement. “If monthly gains continue at the March pace, we could return to the pre-COVID employment peak by July 2022.”

At 62.4%, the labor force participation rate, however, remains slightly below its pre-pandemic level of 63.4%.

The latest jobs report will likely ease some fears of those in the mortgage industry, which has struggled with a big spike in interest rates and continued low levels of housing supply.

“Although mortgage rates have spiked more than half a percentage point over the past two weeks, reducing affordability for many potential first-time homebuyers, the increase in wages will certainly somewhat help offset that hurdle,” said Mike Fratantoni, the Mortgage Bankers Association‘s chief economist. “And the confidence that many potential homebuyers have in their financial situation also benefits from this historically strong job market. We continue to expect that the Federal Reserve will move rates up expeditiously to counter surging inflation, and that this report only adds more urgency to their plans to do so.”


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In the construction industry, unemployment fell 6.0% in March, down from 8.6% a year ago. While overall employment in construction rose in March, residential building construction lost 2,600 jobs, but non-residential building construction gained 2,600 jobs. For the second month in a row, however, there was a solid uptick in residential specialty trade contractor employment, with an increase of 10,200 jobs.

“There was a big increase in hiring for residential specialty trade contractors this month, while residential building dipped slightly,” Kushi said in a statement. “Overall, a net gain of 7,600 jobs for residential construction, which is good news for this labor-intensive industry and for the prospect of more housing supply.”

The real estate sector gained a total of 14,000 jobs in March with real estate gained 6,300 jobs and rental and leasing services gaining 7,400 jobs. Overall, employment in financial activities is 41,000 jobs above its level in February 2020.

Mortgage bankers at the end of February had 290,200 employees, down 1,100 from January, according to the BLS data. Mortgage brokerage shops employed 137,300 workers in February compared to 135,700 in January.

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