Weak Jobs Report Raises Pressure: What Lower Rates Could Mean for Hampton Roads Buyers & Sellers
The Federal Reserve is now expected to cut interest rates multiple times before the end of the year? After August’s jobs report showed continued weakness in the labor market. No one knows for certainty what the Fed will do at anytime! They have not yet decided on the next actionable step forward but the job report suggests there could be shifts because of the latest numbers which would affect the Hampton Roads housing market in 2025.
Key Numbers From the Jobs Report
Jobs added in August: 22,000 (well below expectations)
Unemployment rate: 4.3% (up from 4.2% in July, highest since October 2021)
Revisions: June hiring revised down to negative territory (-13,000), showing the first monthly job losses since 2020
These results follow significant downward revisions in earlier months, signaling that hiring has been much weaker than originally reported.
Lets compare Data to Hampton Roads
Virginia Beach-Norfolk-Newport News MSA (July 2025): Unemployment rate stood at 4.0%, slightly higher than the national average of 3.6% for Virginia FRED
Hampton, VA (July 2025): Unemployment rate was 4.8%, indicating a higher rate compared to both the national and state averages FRED
Labor Market Trends: Since January 2025, Hampton Roads' unemployment rate has increased by 0.6 percentage points, while the national rate has risen by 0.1 percentage point York County
Unemployment in Virginia is 3.6% and Hampton Roads is 4% compared to the US average of 4%
First-time homebuyers: Their median age rose from 35 in 2023 to 38 in 2024, marking a record high
Overall median age of all homebuyers: Also jumped from 49 to 56 years in 2024, the highest ever recorded! for more information about how one community is dealing with these challenges check this blog out!
First-time buyers in Virginia are entering the market later than ever, with the median age now at 38. I’ll be diving into what that means for Hampton Roads specifically in an upcoming blog
Implications for the Federal Reserve
The softness in jobs data increases the likelihood of rate cuts at upcoming Federal Open Market Committee meetings.
A quarter-point cut was already expected in September.
The latest report has fueled speculation of a larger half-point cut.
Bond markets now estimate a 67% chance of three rate cuts before year’s end.
However, inflation remains a wild card. Headline inflation has hovered around 2.7% this summer, and if it rises further, it could complicate the Fed’s decisions.
Mortgage Rates React
Mortgage rates track closely with the 10-year Treasury yield, which fell sharply after the jobs report.
30-year fixed mortgage average: 6.5% this week, the lowest in 11 months
Further easing is likely in the near term if bond yields continue to drop
Economists caution that the Fed’s actions don’t directly set mortgage rates. Instead, housing participants should watch the bond market and upcoming economic data.
Housing Market Outlook
Falling rates should improve affordability for buyers with stable employment. But the cooling labor market may also discourage some households from making large financial commitments.
Home sales remain stuck near 30-year lows.
Sellers are adjusting pricing expectations and showing more willingness to negotiate as they come to terms with the new normal that we have been seeing late summer with houses sitting longer on the market.
Buyers face a balancing act: better borrowing conditions, but uncertainty about job stability.
Realtor.com® Chief Economist Danielle Hale points out that affordability depends not just on rates and prices but also on wage growth.
Bottom Line
The Fed is under pressure to cut rates multiple times in 2025 which can affect the Hampton Roads housing market in 2025 but the overall impacts are still uncertain at this time.
Mortgage rates are likely to fall further, but inflation and government debt risks could limit declines.
Buyers who are financially ready may find more opportunities as more inventory stay longer on market Sturtevant warns that “Participants in the housing market should not try to time rates. They certainly should not expect the Fed’s decision itself to materially impact mortgage rates in the short-term. People who want to buy and are financially ready to do so should take advantage of more inventory and more opportunities for negotiating," and adds that "Sellers in most markets are starting to reset expectations on pricing and are prepared to negotiate in a way they have not over the past few years.” click for more info