H
ome sales may surge if interest rates continue to drop, but the economy's weakening signs could make consumers more cautious. Top industry economists say the latest jobs report paints a solid picture of the labor market, yet some cracks are emerging that might deter potential buyers and sellers.

    If interest rates keep falling, home sales will likely rise, according to Lawrence Yun, chief economist for the National Association of Realtors. However, he notes that this scenario is complex when employers add jobs while mortgage rates decrease. The ideal situation would be a balance between job growth and decreasing mortgage rates.

    The February jobs report showed 151,000 new jobs were added, falling short of expectations. Employers cut 172,000 jobs, the most since July 2020, with temporary employment and leisure and hospitality sectors facing challenges. Lisa Sturtevant, Bright MLS chief economist, says this might be a sign of a weakening labor market.

    Consumer confidence is waning, with consumers growing more anxious about economic conditions. Government employment dropped by 10,000 last month, but Sturtevant notes that federal workforce cuts are not fully reflected in the report. The housing market in areas most affected by these cuts may see shifts, but homeowners will likely take time to decide on selling.

    The Federal Reserve's meeting on March 19 will consider interest rates, taking into account jobs data and inflation. Tariffs are expected to push up prices, but their impact is delayed due to the pause in tariffs.