Job gains accelerated in the second half of 2014. The latest monthly data showed 252,000 net new payroll job additions in December. Over the last 12 months, that total net of new jobs comes to a cool 3 million. The pool of potential homebuyers and the need for commercial building spaces are therefore expanding.
From the low point of 2009, more than 10 million jobs have been created. Recall, however, that 8 million jobs were lost during the painful recession in 2008-09. Therefore, compared with the prior employment peak in 2007, the country has only 2 million workers now. In the meantime over these years, the country’s population increased by nearly 19 million.
More jobs have pushed down the unemployment rate to 5.6 percent, which would be considered almost normal. Frustratingly though for workers, the wages are barely rising. In December the wage rate rose by 1.65 percent from one year before. The weak wage growth is partly reflecting a considerably large number of people who are working part-time.
REALTORS® are mostly not on any company’s payroll and are not included in the wage data. Commission income comes in lump sum and only if there is a closing. All the time spent driving and doing research means nothing if the property does not close. REALTOR® income also varies greatly from one year to the next and from one person to the next.
A typical wage rate by industry is shown below. Note the lower wage rate for retail trade. That is why it is rare to see the same Starbucks crew over a 12-month time span. And each new crew tends to spell your name differently.
Lawrence Yun is Chief Economist and Senior Vice President of Research at NAR. He directs research activity for the association and regularly provides commentary on real estate market trends for its 1 million REALTOR® members.