Last Friday, the Bureau of Labor Statistics released a very
encouraging jobs report. The economy gained 916,000 jobs in March – well above
expert projections of 650,000 to 675,000. The unemployment rate fell again and
is now at 6%.
What does this mean for you?
Our lives are deeply impacted by our nation’s economy. The
better the economy is doing overall, the better most individuals in the country
will do as well. Here’s a look at what four experts told the Wall Street
Journal after reviewing last week’s report.
Michael Feroli, JPMorgan Chase:
“The powerful tailwind of the reopening of economic
activity appears to be gathering force; while the level of employment last
month was still 8.4 million positions below that which prevailed before the
pandemic, it is reasonable to expect that a majority of those lost jobs will be
recouped in coming months.”
Mike Fratantoni, Mortgage Bankers Association:
“We fully expect that this pace of job gains will
continue for months, and anticipate that the unemployment rate, now at 6%, will
be well below 5% by the end of the year.”
Paul Ashworth, Capital Economics:
“With the vaccination program likely to reach critical
mass within the next couple of months and the next round of fiscal stimulus
providing a big boost, there is finally real light at the end of the tunnel.”
Jason Schenker, Prestige Economics:
“People are getting back to work and the vaccine isn’t
just inoculating the population, it’s clearly inoculating the economy.”
What does this mean for residential real estate?
Today, the biggest challenge for homebuyers is the lack of
homes currently for sale. With listing inventory down 52% from a year ago,
bidding wars are skyrocketing. As a result, home prices are climbing.
One answer to this challenge is to build more homes to
satisfy the demand. The latest jobs report gives hope for new housing
construction, and therefore brings hope to buyers as well. Here’s what three
industry economists said about the increase in construction jobs revealed in
Lawrence Yun, Chief Economist, National Association of
“Construction jobs boomed in March, one of the largest
monthly gains ever. This raises the prospect for more home building and more
inventory reaching the market in the upcoming months. The housing market has
been hot with fast rising home prices but has been constrained by a lack of
supply. By hiringmore workers and building more homes, home prices will
move to a manageable level to give more Americans a shot at ownership.”
Odeta Kushi, Deputy Chief Economist, First American:
“Great jobs report for a housing market in an inventory
crisis. Residential construction building jobs increased 3.9% from pre-2020
recession peak in Feb. 2020. The construction industry remains a
labor-intensive industry. We need more hammers at work to build more homes.”
Robert Dietz, Chief Economist, National Association of
“Good job numbers in March for residential construction.
37,000 gain from Feb to March. 3.03 million total employment for home builders
and remodelers, and up 49,100 from Jan 2020.”
An improving economy with a falling unemployment rate will
benefit households across the country, as well as the overall housing market.