Recent news regarding employment rates has housing professionals breathing a sigh of relief. Friday’s May Jobs Report reported that employers added a plush 280,000 jobs last month, which hints that there will be no slowdown in job growth anytime soon.
“The May Jobs Report was a good affirmation that indeed the economy is back on a positive track after another dismal winter,” says realtor.com® Chief Economist Jonathan Smoke. “This is very positive for housing.”
Smoke notes that the consensus expectation for May was for 220,000 jobs and a static unemployment rate of 5.4 percent. The reality tops that, with more jobs added than anticipated and a general rosy outlook for the rest of the year.
“The economic backdrop is that we’ve created 3 million jobs over the last 12 months,” says Smoke. “And almost as important, the critical age group of 25-34 year olds has seen 1 million jobs created over the same time frame”
Why is this such exciting news for housing? According to Smoke, the 25-34 age group is the typical range for the average first-time buyer household, which still represents the largest chunk of home buyers in the market.
“As that group’s economic situation continues to improve, their housing activity follows and has a material impact on both existing and new home sales,” says Smoke. “With more jobs, more people in the labor force, and higher wages materializing, this spring’s strong pace for home sales will continue.”