Real Estate Insider Blog
By David Crowe
An improving labor market will help support growth in home building in 2015. And the latest report offered the most positive jobs data in some time. According to the Bureau of Labor Statistics, 321,000 jobs (seasonally adjusted) were added to the economy in November, and the numbers for September and October were revised up by a combined 44,000. Prior to November, the average monthly gain in jobs for 2014 had been 233,000. The BLS data also indicated that the average workweek and hourly earnings improved.
Home builders and remodelers added 16,700 jobs to the economy in November, according to the BLS data. Over the last year, residential construction employment has grown by 122,000.
However, a separate labor market report on job turnover (the BLS JOLTS survey) revealed that the number of unfilled construction sector positions rose to 136,000 in October (the JOLTS data come with a two-month lag). This is the fourth-highest total for open construction jobs during the post-recession period and a demonstration of the challenge some firms in the industry have obtaining access to labor as construction activity expands.
Another industry headwind has been access to capital. While access to AD&C loans remains an issue, there are signs of gradual improvement. A quarterly NAHB survey on construction lending indicated easing lending conditionsduring the third quarter. These results mirror a broader Federal Reserve survey showing an...
Consumers were more optimistic toward the economy than they've been at any point in the last five years, according to Fannie Mae's most recent 2015 National Housing Survey.
The percentage of respondents who said they believe the economy is on the right track increased by 3 percentage points since January's survey up to 47 percent, an all-time high since the survey began nearly five years ago. The rise in consumer optimism is largely attributed to recent employment gains, which totaled nearly 300,000 for February and averaged 266,000 per month in the last 12 months, according to the most recent report from the Bureau of Labor Statistics. In that same BLS report, the nation's unemployment rate dropped to 5.5 percent, its lowest level in nearly seven years.
Also hitting an all-time high for Fannie Mae's housing survey was the percentage of respondents who said they believe it is easier to get a mortgage today (54 percent). The share of respondents who said they believe it would be difficult to get a mortgage dropped by 4 percentage points to an all-time survey low of 43 percent.
"Continuing improvements in consumer attitudes in this month's National Housing Survey lend support to our expectation that 2015 will be a year of the economy dragging housing upward," said Doug Duncan, SVP and chief economist at Fannie Mae. "The share of consumers who think the economy is on the right track rose to a record high since the inception of the survey...
Email Christopher Milson