During my years of reporting on the housing market, I have often written about economic issues that affect home affordability and mortgage rates, such as inflation, gross domestic product (GDP), and the jobs market. Employment, in particular, plays a bigger role in the real estate market than many people think.
The Bureau of Labor Statistics released the March Employment Situation Summary on Friday. Upon first glance, a lot of the data looks encouraging — new nonfarm payrolls hit 178,000, a drastic improvement over February’s revised -133,000 decrease and way better than experts’ predictions.
The unemployment rate also ticked down from 4.4% in February to 4.3% in March.
However, real estate technology company Zillow did not consider the jobs report to be good news for homebuyers. The details and nuance behind the report signal that buyers could struggle to afford housing as the home-buying season gets underway.
Zillow points out that the labor market is too volatile
Yes, the labor market’s 178,000 new nonfarm payroll jobs in March looks promising. However, the BLS also announced the revised employment numbers for January and February.
The BLS revising numbers is standard practice. After the bureau gives its initial monthly report, it collects more data that wasn’t available yet, such as late survey responses from businesses.
The Zillow research on the March 2026 jobs report noted that the revised January number of added nonfarm payroll jobs showed an increase of 160,000 rather than the original report of 126,000. However, the revision also showed that the February nonfarm payroll job data was even worse than originally reported. February jobs dropped from -92,000 to -133,000 after the revision.
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Combined, January and February added 7,000 fewer nonfarm payroll jobs than previously thought — 27,000 versus 34,000.
“Taken together, those revisions reinforce a pattern of higher month-to-month volatility without much underlying momentum,” Zillow wrote in its assessment.
The company also noted that March’s gain in employment wasn’t widespread among different sectors. Healthcare added a lot of new jobs, but that was partly due to workers returning from strike. Construction and transportation/warehousing also added more jobs. However, federal government and financial activities jobs decreased.
People who work in the sectors that are cutting jobs may be less likely to be able to afford a home.
The BLS household data was discouraging
The unemployment rate dropped from 4.4% in February to 4.3% in March, which seems like a step in the right direction. However, the BLS household data told a different story.
The number of Americans “marginally attached to the labor force” rose by 325,000 in March. People in this category want jobs, are available to work, and have job hunted in the last 12 months — but they haven’t looked for jobs in the previous four weeks and aren’t currently considered part of the workforce, according to the BLS March Employment Situation.
The number of “discouraged workers,” or people who believe no work is available for their situation, went up by 144,000 in March.
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“So while the unemployment rate moved down to 4.3% from 4.4% in February, part of that improvement reflects more people moving to the sidelines rather than a stronger hiring environment,” Zillow wrote in its findings.
Wage growth wasn’t particularly impressive in March. Average month-over-month hourly earnings increased 0.2%, and annual earnings rose 3.5%. These numbers are down from February’s monthly increase of 0.4% and year-over-year incline of 3.8%.
Between the revisions to January and February data, differences in job growth by sector, and disappointing household data, we probably shouldn’t expect more Americans to be able to afford to buy houses this spring. If you’re unemployed or underemployed, you’re less likely to have the funds to buy or the employment history to qualify for a mortgage loan.
What the job report means for homebuyers
“March’s payroll rebound is encouraging on the surface, but the broader labor market still looks stalled. Job growth has changed little on net over the past year, and the recent pattern of downward revisions points to weaker momentum than the headlines suggest,” Zillow senior economist Orphe Divounguy said.
Here’s how a stale labor market could impact homebuyers in the coming weeks and months.
- People may choose to wait to buy a home if they lose their job or work in a sector that is unstable.
- Wages aren’t improving, so Americans might not be able to afford the down payment or monthly mortgage payments associated with buying a house. This could result in people holding off on buying, or they could decide to buy only to become “house poor.”
- The jobs situation might also affect the number of people who decide to list their houses. “Households make decisions about buying, selling and moving based on confidence in their job security, income growth and overall financial position,” Zillow wrote in its analysis.
- “A weak jobs number could bring more attention back to the underlying softness in the economy and help improve the outlook for rates,” Jeff DerGurahian, chief investment officer and head economist at loanDepot, had said before the BLS data dropped. However, the report came with good and bad news, so mortgage rates probably won’t budge much in response to the labor market data.
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