Lower than expected employment figures in May indicate that economic growth could be slowing, which is negative for the housing market.
Last month, job creation only grew by an estimated 69,000 positions, according to a report from the Bureau of Labor Statistics. This is in comparison to an increase of 115,000 jobs in April. As a result of this decline, the unemployment rate edged higher, to 8.2 percent. Last month, an estimated 12.7 million were unemployed.
"The slowdown is reminiscent of the monthly patterns of the spring slowdown witnessed over the last two years that continued through the summer months." said Fannie Mae chief economist Doug Duncan in regard to the findings. "If this pattern recurs, we expect that homes for a meaningful housing recovery will be delayed once again."
This slowdown in the job market could make it more difficult for prospective borrowers to qualify for mortgages, since they may not be able to meet certain debt-to-income ratios. In addition, current homeowners who have been struggling with the safety and soundness of their employment could also suffer from this outcome.