|
Believe
it or not, interest rates do not drive housing demand. Jobs do. We have had
some of the hottest housing markets on record when Unemployment Rates were low
but interest rates where high. Simply speaking - if you feel more secure about
your job, you are more likely to purchase a home.
Friday's Unemployment Rate dropped from 7.6% to 7.5% but more importantly, the economy added 165,000 non-farm jobs. Stronger housing means more jobs, not just construction jobs, all jobs. When consumers feel more confident about the value of their homes, they spend more money. Their homes, after all, are likely their single largest investment.
They
may not take the money out of their homes, but they just feel more financially
comfortable, and that comfort sends them out spending. They also spend more on
home improvement.
Residential
construction jobs increased by just over 6,000 in April from the previous month,
according to the Bureau of Labor Statistics, and residential specialty trade
contracting jobs (plumbers, electricians, roofers, etc.) grew by over 7,000.
Retailers
are also seeing the effects of housing growth. Homeowners spend an average
$7,400 furnishing a newly built home, according to the National Association of
Home Builders.
"Spending
at furniture and appliance stores is finally coming back, which has meant more
hires there since the start of the year," added Swonk.
Home
prices were up just over 10 percent nationally in February, according to
CoreLogic, which continues to bring thousands of homeowners out from underwater
on their mortgages. That has allowed more borrowers to refinance to lower
monthly payments, which in turn gives them more spending money. It also gives
them more confidence that they will be able to afford more in the coming year.
"Consumers'
views regarding the housing market have been increasingly more positive," noted
Fannie Mae's chief economist Doug Duncan. "Our April National Housing Survey, to
be released next Tuesday, is expected to show that the housing market is
gradually approaching its sweet spot, as the share of consumers who believe that
it is a good time to buy remains high while the share of those who think it is a
good time to sell continues its upward trend witnessed over the past year."
|
Ed Hughes, Realtor - Andrew Mitchell & Co - 617-875-4132, ehughes@andrewmitchellco.com
Tuesday, May 7, 2013
Housing Recovery Shows Up In Job Gains:
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment