ShareThe job market is strong. A net additional 256,000 workers were hired in December, bringing the total for the year to 2.2 million more jobs. The unemployment rate notched lower to 4.1%. The wage growth rate of 3.9% is outpacing inflation at 2.7%. All this positive news is, however, temporarily bad news for interest rates.
Good economic data do not have to be associated with higher interest rates. More production and higher productivity can bring down inflation and interest rates. However, higher rates now are due to lingering inflation, which has not been fully contained. The oversupply in the apartment sector implies that inflation will be much calmer in the future. But until then, mortgage rates will stick near the current elevated rates. In the meantime, consumers are looking for inventory, and more choices have led to gains in home sales in many markets.
