Quick take ✅
Moody’s Analytics chief economist Mark Zandi warns that labor-market momentum is fading and that housing is vulnerable as incentives lose punch and inventories climb. Bureau of Labor Statistics (BLS) data show that August payroll growth barely moved while unemployment sits higher than earlier in the cycle, a mix that typically cools buyer confidence. North Jersey can still outperform, but sellers need sharper pricing, faster adjustments, and a backup plan if hardship hits. 🏠
Who is Mark Zandi, and why sellers should care 🧠
Mark Zandi serves as chief economist at Moody’s Analytics. He co-founded Economy.com, regularly briefs corporate boards and policymakers, and has testified before the Financial Crisis Inquiry Commission on the causes of the 2008 crisis. His books, “Financial Shock” and “Paying the Price,” detail how credit cycles ripple into housing and jobs. In 2006 he published “Housing at the Tipping Point,” a research note that flagged the risk of a housing downturn spilling into the broader economy. That public record, plus his ongoing macro work at Moody’s Analytics, is why his current caution carries weight for New Jersey real estate.
The freshest labor signal, in plain English 📊
BLS tables show total nonfarm payrolls rose by roughly 22,000 in August, prior months were revised lower, average hourly earnings rose about 0.3 percent month over month and 3.7 percent year over year, and the private-sector workweek hovered near 34.2 hours. When hiring stalls and hours flatten, marginal buyers tend to step back and more contracts wobble.
Housing data that line up with Zandi’s caution 🏡
Builders are leaning on incentives
The National Association of Home Builders (NAHB) Housing Market Index (HMI) remains below the neutral 50 line. NAHB also reports that roughly two-thirds of builders are offering sales incentives, and more than one-third cut prices with an average reduction near 5 percent. That is classic late-cycle behavior. 🧱
New-home supply is elevated
U.S. Census Bureau figures put new-home months’ supply around 9.2 months for July, with roughly 499,000 homes for sale nationwide. Higher supply gives buyers leverage, especially on homes that need work or carry high monthly fees.
Resale inventory is climbing, contracts are shakier
Realtor.com’s July snapshot shows active listings rising for the 21st straight month, alongside longer time on market. Redfin’s deal tracker estimates that about 15.3 percent of July contracts fell through, the highest July cancellation rate in its records since 2017. Softer demand is meeting more choice. 🗂️
Prices are decelerating nationally
The S&P CoreLogic Case-Shiller National Home Price Index (Case-Shiller) shows year-over-year gains slowing through mid-2025, with leadership tilting toward the Northeast and Midwest while several Sun Belt markets lag. For sellers, comps must be fresher and more local.
Mortgage activity remains tepid
The Mortgage Bankers Association (MBA) weekly survey shows total applications down in late August, with the purchase index slipping. Buyer caution shows up in mortgage apps long before it shows up in closed sales. 🧾
Existing-home momentum is only gradual
The National Association of Realtors (NAR) tallied July existing-home sales near a 4.0 million annual rate, inventory near the mid-4-months range, and a median price near 422,400 dollars, up only a touch year over year. This is movement, not a boom.
Recession indicators worth watching, and why they matter for housing 🧩
Job Openings and Labor Turnover Survey (JOLTS)
The BLS JOLTS report shows openings easing and quits subdued. A lower quits rate signals reduced worker confidence, often translating to fewer first-time buyers and more financing fallout.
Institute for Supply Management Purchasing Managers’ Index (ISM PMI)
The Institute for Supply Management (ISM) publishes two monthly indexes where 50 is neutral, one for manufacturing and one for services. Recent readings show manufacturing below 50, a contraction, and services a little above 50, mild expansion, with soft spots in hiring. When factory activity contracts, overtime and temporary work are usually cut first, which often reduces buyer confidence and shows up as fewer showings and shakier contracts. 🏭
Leading Economic Index (LEI)
The Conference Board’s LEI slipped again and is down on a six-month basis. A sustained decline has historically preceded weaker hiring and spending, which lengthens days on market and raises price-cut frequency.
Jobless claims and labor churn
U.S. Department of Labor weekly filings show initial jobless claims drifting higher than recent lows. Together with subdued quits in JOLTS, this points to cooler labor churn, a headwind for entry-level demand.
U.S. Treasury yield curve and mortgage rates
U.S. Treasury data show the curve recently steepening as long yields climbed. Even if the Federal Reserve (the Fed) trims short-term rates later, sticky long yields can keep mortgage rates elevated, which slows affordability relief. 💸
Senior Loan Officer Opinion Survey (SLOOS)
The Federal Reserve’s SLOOS reports weaker demand for residential mortgages and tighter standards across several lending categories. Tighter credit reduces the pool of qualified buyers and increases retrade risk.
Permits and starts
Census Bureau housing permits and starts have been choppy. If permits sag further, that often foreshadows fewer new listings downstream and less construction employment, two channels that touch local housing liquidity.
In plain English, what all of that means ✍️
I’ll put this in plain english for you… The newest reports say the job market is cooling. Fewer new jobs are being added, fewer people feel safe switching jobs, and some are filing for help after losing work. Home builders are cutting prices and using deals to sell, and there are more new homes and resale homes on the market. More buyers are walking away from contracts, and fewer people are applying for mortgages. Home prices are still up a little, but they are not rising fast. Other warning signs include slower factory activity, a small lift in services, a leading index that has been slipping, and banks being pickier about loans. Put together, this means buyers are careful, so sellers should price fairly, fix easy issues, and stay flexible on terms.
What this means in North Jersey specifically 🗺️
The Northeast remains tighter than the South and West, and parts of our region still lead on price growth. Even so, national patterns are creeping in: longer marketing times, more price reductions, higher cancellation rates. Expect Bergen and neighboring counties to feel that mix first in dated homes, higher-fee condos, and properties with unresolved issues, for example oil tanks, permits, and assessments. The takeaway for sellers: win on presentation, pricing precision, and clean terms, do not bank on last spring’s comps. 🧮
Seller playbook by situation 🛠️
Standard resale, light updates
• Price to the most recent 60 to 90 days of closed comps, not last year’s peaks
• Pre-inspect, fix quick hits, and stage for photos
• Use targeted credits for closing costs rather than large list-price cuts
• If you see fewer than two showings per week by day 14 to 21, adjust quickly
As-is or dated property
• Run parallel paths, a retail list-as-is plan plus a verified cash offer for certainty
• Safety basics matter, handrails, leak fixes, smoke and carbon-monoxide detectors
• Full disclosure reduces retrades and protects your net
Inherited property or probate
• Decide early on contents and timing to reduce carrying costs
• If funds are limited, market to light-rehab retail buyers or consider a quick as-is exit
Tenant-occupied
• Audit the lease and local rules first
• If showability is poor, negotiate a move-out with written consideration and clear dates
• If you sell occupied, present a clean rent roll, an estoppel, and payment history to attract investors
Preforeclosure or hardship
• Order payoff and reinstatement quotes now
• If you have 30 to 45 days, list with a cash backup
• If you have 7 to 10 days, certainty usually beats a higher financed offer
Pricing and terms that work when momentum slows 🎯
Anchor to months of supply for your property type, not hopes. Offer fast response times, flexible closing windows, and pre-cleared certificates of occupancy (CO) where possible. Use credits to solve buyer cash constraints without torpedoing list-price optics.
What to watch next ⏱️
- Payrolls and unemployment: BLS monthly tables turning negative, paired with a rising unemployment rate, would dent buyer confidence.
- Builder incentives and traffic: NAHB HMI readings that stay low, plus rising incentive use, point to tougher resale competition on price, condition, and certainty.
- Supply, cancellations, and mortgage flows: Realtor.com inventory trends, Redfin cancellation rates, and MBA purchase applications together map the buyer-seller balance.
- Macro gauges: The Conference Board’s LEI and ISM PMI, if they weaken further, raise downside risk for demand and construction.
How NJ House Partners can help 🤝
We run two paths under one roof, a full-market listing plan to maximize price, and an investor network for fast as-is exits when speed matters. For a private walk-through and a same-day plan, call or text 201-214-1349.
Sources credited in text
Moody’s Analytics, Bureau of Labor Statistics (BLS), National Association of Home Builders (NAHB), U.S. Census Bureau, Realtor.com, Redfin, S&P CoreLogic Case-Shiller National Home Price Index (Case-Shiller), Mortgage Bankers Association (MBA), National Association of Realtors (NAR), The Conference Board, Institute for Supply Management (ISM), U.S. Treasury, Federal Reserve (the Fed), Federal Reserve Bank of St. Louis.
