November 2019 saw 266,000 new jobs added to the nation’s work force, according to the US Bureau of Labor Statistics. Additionally, the unemployment rate remained flat at just 3.5% and labor force participation remained at 63.2%.
Such statistics are great news for the housing industry. Joel Kan, the vice president of economic and industry forecasting with the Mortgage Bankers Association (MBA), said, “The November jobs report was yet another piece of good news for the housing market. We continue to see growth in the purchase market, supported by steady job gains and slowing increasing housing inventory. Payroll growth surged by 266,000 jobs in November – the strongest monthly gain since January 2019.”
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Kan continued. “This month’s numbers, combined with upward revisions to the prior two months, raised the average for 2019 to around 180,000 jobs per month, which still indicates a very strong labor market. The unemployment rate ticked down slightly to 3.5% and matched the 50-year low. Wage growth increased +3.1% compared to last November and has lately been more closely aligned with home-price appreciation. Low mortgage rates and moderating home prices help home buyer affordability as well.”
Lawrence Yun, chief economist with the National Association of REALTORS® (NAR), couldn’t have agreed more with Kan. “The job market is going gangbusters with 266,000 net new jobs over the past month, driving the unemployment rate to an incredibly low 3.5% and wages perking up to 3.1%. Therefore, the Federal Reserve is likely to stand firm on the sidelines, with neither a rate cut nor hike, through the end of the 2020 political election year.”
Yun continued. “Housing demand will further rise. Home sales could easily break meaningfully higher in 2020, especially given increased home construction of late. Commercial real estate will be another big v=beneficiary as occupancy will further rise for office spaces, industrial warehouses and apartments. Given how scarce new construction is, vacancy rates will fall and rents will rise.”
Thanks to BuilderOnline for source material.