Big numbers on employment with a whopping 271,000 net new job creation in October. Over the past 12 months the tally comes to an impressive 2.8 million net new jobs. Real estate can therefore expect further expansion.
Even better news: wages are breaking higher. The average hourly earnings rose by 2.5 percent over the past 12 months to $25.20, which is the best gain in seven years. Given that rents and home prices are rising faster than income, more gain in income is needed to help on the affordability front. Wages in the construction rose by 2.6 percent to $27.54 per hour.
Even though construction jobs pay more, only 5,000 jobs were created in the construction of residential homes and related general contractor work. Today there are a total of 2.5 million working in the residential construction area, which is about one million below the peak employment in the sector a decade ago. Homebuilders constantly mention the worker shortage in hindering the building of more homes.
The unemployment rate remained at 5.0 percent, which is reflecting good conditions. But the opposite side of the coin – the employment rate – measuring what percentage of people have jobs still remains low and stuck at 59 percent. Therefore, it is a mix bag still on employment conditions.
As to REALTORS®, the overall membership figures have been rising at around 6 percent from one year ago. Some states are experiencing a faster gain such as in Florida, Utah, and South Carolina where the local job market and the local housing market has been doing well. Though the median income is slightly under $50,000 per year, one should keep in mind that the median is derived from 23 percent of members earning $100,000 or more per year and 19 percent of members earning less than $10,000 per year.
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.