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Today on Real Estate Backstage, a strong jobs report and higher-than-expected inflation make it less likely that we’ll see another Fed rate cut any time soon … the Department of Housing and Urban Development plans to slash about half of its workforce … A debate over “Days on Market” heats up across the industry … and a broker in New York files a lawsuit against Zillow.
Strong Jobs Report
According to RISMedia:
“Total nonfarm payrolls increased by 143,000 in January, while the unemployment rate ticked down slightly to 4%, the U.S. Bureau of Labor Statistics reported on February 7. Job gains were in the healthcare, retail trade and social assistance sectors, while job losses were seen in the mining, quarrying and oil and gas extraction industries. While the unemployment rate had been relatively steady for seven months, wavering between 4.2% and 4.1%, the raw number of unemployed in the U.S.—at 6.8 million—ticked down slightly from 6.9 million last month.
The report also showed an average hourly earnings gain of 4.1% over the prior 12 months. Bright MLS Chief Economist Lisa Sturtevant offered a partial recap and additional commentary on what today’s jobs report might mean for the housing market moving forward.
‘The labor market is on solid footing to begin 2025,’ she said. ‘While there have been some signs of cooling labor market conditions, such as fewer job openings, today’s report indicates that the U.S. economy remained resilient to start the year. In January, the economy added 143,000 jobs, which was slightly below expectations. Job growth may have come in lower than predicted because of the impacts of winter storms in the East and South, as well as the wildfires in Los Angeles…(w)ages continue to rise faster than inflation.
‘Although today’s job report is generally positive, it actually offers up a mixed bag for the housing market. With more jobs being added in relatively high-wage sectors, and overall earnings on the rise, prospective homebuyers will feel more confident heading into the spring housing market. However, with employers still adding jobs at a healthy pace and inflation above the Fed’s 2% target, the central bank is likely to keep interest rates unchanged at its meeting in March, which means mortgage rates could remain in the high 6% range heading into spring.’”
(Source: RISMedia.com)
January Inflation Data
According to the Wall Street Journal:
“Consumer prices rose briskly in January, extending a recent pattern of increases at the start of the year that likely derails the prospect for Federal Reserve rate cuts anytime soon.
The Labor Department said Wednesday that prices rose last month 0.5% from December on a seasonally adjusted basis. That was the largest monthly increase since August 2023 and well ahead of economists’ expectations for a milder increase of 0.3%.
The gain pushed 12-month inflation to 3% in January. That marked a pickup from December, when prices rose 2.9%. Markets reacted swiftly. The Dow Jones Industrial Average and the S&P 500 both fell. Bond yields jumped.
‘Inflation has now been around these rates for some time and clearly isn’t coming down decisively anymore,’ said Paul Ashworth, chief North America economist at Capital Economics … The bigger-than-expected increase in prices last month largely reflected higher prices for used cars and auto insurance, said Omair Sharif, founder of the research firm Inflation Insights.
Core prices, which strip out volatile food and energy prices, rose 0.4% from December on a seasonally adjusted basis, the largest increase in nearly two years. Core inflation was 3.3% over the year.
Egg prices rose more than 15% from December, the largest increase since June 2015. That accounted for about two-thirds of the total monthly increase in grocery prices. A bird flu outbreak is fueling the price increase.
Wednesday’s report was particularly discouraging because housing and rental costs, which have been moderating and are expected to continue to ease, weren’t the culprit. Instead, the latest report pointed to inflationary pressures across other goods and services that had seen a slowdown in price pressures recently.”
(Source: wsj.com)
Better Mortgage Spreads
According to HousingWire:
“Mortgage spreads refer to the difference between the 10-year yield and the 30-year mortgage rate. Historically, these spreads can fluctuate, becoming better or worse depending on the state of the economy. When mortgage spreads widen, the gap between the 10-year yield and the 30-year mortgage rate increases, resulting in higher-than-normal mortgage rates.
In recent history, these spreads typically range between 1.60% and 1.80%. In 2023, spreads reached as high as 3.10%. We likely would not have seen mortgage rates at 8% that year if the spreads hadn’t worsened after the banking crisis. However, spreads have improved in 2024 and 2025, which is helping to limit how high mortgage rates can go this year.
What does this mean in real-life terms? If we had experienced the worst mortgage spreads of 2023, mortgage rates would be 0.72% higher today. On the other hand, with regular mortgage spreads, mortgage rates would currently be 0.68% to 0.78% lower. If we return to typical spreads, many housing issues could be resolved, as home sales could grow with mortgage rates near 6% and remain stable for some time.”
(Source: HousingWire.com)
Fed Chair Jerome Powell Testifies Before the Senate
According to RISMedia:
“Taking center stage, inflation, bank regulations, the housing crisis and the Consumer Financial Protection Bureau (CFPB) were key topics as Federal Reserve Chair Jerome Powell testified before the Senate Committee on Banking, Housing and Urban Affairs.
During Tuesday’s Semiannual Monetary Policy Report to Congress, Powell reemphasized the Fed’s position in not lowering rates. At the January 29 Fed meeting, Powell said there wouldn’t be any immediate cuts, but it would depend on the ‘incoming data, the evolving outlook and the balance of risks.’
Before Congress, Powell reassured lawmakers that the U.S. economy remains strong with GDP growth at 2.5%, unemployment at 4.1% and a 2.6% increase in personal consumption expenditures (PCE). This comes as mortgage rates remain elevated, keeping homeownership out of reach for Americans.
Senator Jim Banks (R-Indiana) pointed out that home prices in some states have increased over 60% in the past five years, leaving three-quarters of Americans unable to afford an average home in their neighborhood. He asked Powell how Fed decisions on monetary policy affect these families. Powell acknowledged the affordability crisis, but argued that the Fed does not set mortgage rates, only interest rates.
‘Nonetheless, we’re clearly having an effect on the housing market, and that’ll unwind as we normalize policy, but we’re still going to be faced with high insurance costs and high material costs and labor shortages and all the things that keep driving housing prices up across the country,’ answered Powell.”
(Source: RISMedia.com)
HUD to Slash Half of its Workforce
According to Inman:
“The U.S. Department of Housing and Urban Development (HUD) will eliminate half of its workforce as part of the Trump administration’s latest effort to reduce federal costs, Bloomberg reported late Thursday night.
Antonio Gaines, president of HUD’s Union, AFGE National Council 222, told Bloomberg the job cuts will significantly impact employees in offices that enforce civil rights laws, compile housing market data, and fund disaster recovery efforts. The Federal Housing Administration (FHA), which provides mortgage loans, will be exempt.
HUD, which supports housing assistance, fair housing practices and community development, currently employs approximately 9,600 workers, according to its website.
HUD employees were asked to justify hundreds of the agency’s contracts on Monday, using a spreadsheet where workers would indicate whether the contracts involved diversity, equity and inclusion (DEI) components or if the contractor was competent, NPR reported.
The request left workers wondering if they would be the next to be downsized by the Department of Government Efficiency (DOGE).
On Feb. 11, President Donald Trump ordered federal agencies to begin ‘large-scale reductions in force,’ prioritizing the removal of workers who perform duties not explicitly mandated by law, including those involved in DEI programs.
This directive followed Trump’s executive order implementing DOGE’s workforce optimization initiative, which mandates agencies to collaborate with DOGE to reduce federal employment and limit hiring to essential roles. The initiative also evaluates which agency or agency components could be eliminated or merged based on legal necessity.
The HUD layoffs are part of a broader wave of federal restructuring. This week, the Consumer Financial Protection Bureau (CFPB) saw major changes, including the nomination of Jonathan McKernan as director on Tuesday and the shutdown of several bureau’s functions.”
(Source: Inman.com)
The “Days on Market” Debate
According to a recent article from Real Estate News:
“In the months since the NAR settlement went into effect, a number of other contentious issues have risen to the surface, with industry leaders and real estate professionals debating topics including association membership requirements, the value of MLSs, and the merits of the Clear Cooperation Policy versus private listing networks.
The CCP has been especially divisive, and much of the opposition to the policy centers around the idea of seller choice — a notion that has led some in the industry to revisit one of the more basic aspects of a real estate listing: days on market (DOM).
Unlike other listing details such as price or square footage, ‘days on market’ may be more complicated than it seems. When does it start, and is it the same as ‘days on the MLS?’ Is there a defined standard, or is it more subjective? Are there ethical or legal consequences for conflating or misrepresenting this information? And how can DOM work for or against buyers and sellers?
‘The second you have a listing agreement and you start holding the property out to the public for purchase, that’s a day on the market,’ said Gary A. Pickren, a founding partner and attorney with South Carolina-based Blair Cato Pickren Casterline and a board member of the Real Estate Commission of the South Carolina Department of Labor, Licensing and Regulation. ‘There’s a difference between days on market and days on MLS. The problem is that real estate agents are confounding the two and saying it’s the same thing. It’s not.’
In a recent LinkedIn post, James Dwiggins, co-founder and CEO of NextHome, backs up Pickren’s premise, adding that even if a listing is not on the MLS but is being shared within a brokerage internally, ‘days on market is happening.’ He goes further, suggesting that not accurately tracking this metric — or misrepresenting it to clients — ‘could be deemed as fraud’ and a violation of NAR’s code of ethics.
However, NAR’s own language suggests that there is some flexibility for MLSs and brokers to determine when DOM starts. Brian Schneider, partner at ArentFox Schiff and legal counsel for Bright MLS, told Real Estate News ‘there is no common, standardized definition for days on market,’ and there can even be variation among home search portals and public websites depending on the data available to them. ‘It’s up to the website how to calculate that,’ he said.”
(Source: RealEstateNews.com)
New York Broker Sues Zillow
According to Inman:
“A New York City broker filed a class action lawsuit against Zillow this week, alleging that the company’s StreetEasy apartment platform effectively hid rental listings but still charged a daily fee to the agent.
George T. Spyridakis, an associate broker with eXp, filed his complaint in the U.S. District Court for the Western District of Washington in Seattle, near Zillow’s headquarters.
Spyridakis alleged he paid $7 daily for each listing, and that he has listed over 250 properties for rent or for sale on StreetEasy, but that listings on occasion have been “masked” from public view.
‘Zillow allows multiple listing Realtors to list the same property for rent at the same time on its StreetEasy platform, charging each listing Realtor $7.00 per day,’ Spyridakis said in his complaint.
He alleged that only the most recent rental listing agent would be displayed on the platform, ‘masking or otherwise removing from public view all prior listing Realtors, while continuing to charge the prior listing Realtor the $7.00 per day fee for the listing.’ …
In New York, multiple brokers can advertise the same unit. But StreetEasy policies appear to seek to prevent that from happening. ‘Only one copy of a rental listing is permitted on StreetEasy,’ the company’s listings quality policy says. ‘We will not approve the same unit to be advertised by more than one brokerage, landlord, or owner.’
Spyridakis said the alleged masking occurred on ‘numerous occasions, causing [him] to lose business, in addition to its daily advertising fee paid to Zillow.’”
(Source: Inman.com)
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