In the old days, locked in a house would mean that the occupants are secure from threats emanating from outside their house. Today, they are also more likely to have not only a lock, but also a security system and/or video cameras. But this is not really the type of “locked in the house” we are referring to this week. The modern version of locked in a house is a purchaser bought a home during the pandemic and obtained a very low interest rate, perhaps around three percent.

Many of these homes have appreciated in value and changes in their life have made it advantageous for them to make their next move. Perhaps they have added children, or taken a job in another area – or been called back into the office. Perhaps they are getting divorced. But with a three percent interest rate and current rates closer to 6 percent or so, the owners feel locked into their house. Along with many years of not building enough homes, this phenomenon and baby boomers aging in place are the more important factors causing an inventory shortage today. When will this change?

Any downward movement in interest rates would help. Hence, Friday’s jobs report gave us a clue as to whether the Federal Reserve stands ready to end their tightening cycle. The economy added 339,000 jobs in May and the previous two months of data were revised upward by 93,000. This was much stronger than expected. The unemployment rate rose to 3.7%, an indication that more workers are re-entering the labor force. Wage growth rose 4.3% annually, slightly lower than the previous month. All in all, this data points to an interesting decision by the Fed when they meet next week – as the “pause” seems a bit less likely after this report. Right now, the Fed may hold the key to all these locks.

Dave Hershman is the top author in the mortgage industry. Dave has published seven books, as well as hundreds of articles and is the founder of the OriginationPro Marketing System and Mortgage School. Want to send this commentary and other news in a personalized format to your sphere database or on social media?  Sign up for a free trial at