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Is the Labor Market Impeding Housing Growth?

jobsIn June, employers created 287,000 jobs, making this the greatest improvement seen in eight months. The U.S. Bureau of Labor Statistics released their monthly employment report measuring what was happening in the job market a week after Britain voted to withdraw from the European Union. The report findings supported the idea that currently the U.S. economy remains resilient in the face of global controversy.

According to Lorraine Woellert, Senior Managing Editor for Redfin, “while job creation is moving in the right direction, progress is slow and big challenges remain.”

Woellert states that workers are currently in higher demand although they currently failing to increase their earnings. She also states that wage growth is still lacking and she feels not everyone is benefitting from low unemployment.

“The job market’s stubborn refusal to heal despite a big pickup in employment makes it a lot harder for the economy to create future homebuyers,” Redfin chief economist Nela Richardson said.

“The job market’s stubborn refusal to heal despite a big pickup in employment makes it a lot harder for the economy to create future homebuyers.”

Nela Richardson, Chief Economist, Redfin

In accordance to Woellert’s post as well as commentary from Fannie Mae, concerns about job security and income growth may have been the catalyst for why home buying decreased for the previous month. Less of the population reported a strong increase in income and according to Fannie Mae nearly 60 percent of those surveyed stated that they felt the economy is on the wrong track.

“Growing pessimism about the overall direction of the economy gives us further pause as it now stands at the highest level we’ve seen in our National Housing Survey in the last two years,” Fannie Mae chief economist Doug Duncan wrote.

Woellert states that “the economy probably isn’t as strong as June’s outsized 287,000 jobs suggest,” but “Nor is it as weak as May’s really low report of 11,000 jobs.” She believes that “[The economy is] still moving in the right direction, just too slowly.” In regards to the progression of the housing market, according to Fannie Mae’s Home Purchase Sentiment Index those surveyed who shared that they feel now is a good time to sell a home and now is a good time to buy a home each respectively increased, showing a potential for a continued positive increase.

About Author: Kendall Baer

Kendall Baer is a Baylor University graduate with a degree in news editorial journalism and a minor in marketing. She is fluent in both English and Italian, and studied abroad in Florence, Italy. Apart from her work as a journalist, she has also managed professional associations such as Association of Corporate Counsel, Commercial Real Estate Women, American Immigration Lawyers Association, and Project Management Institute for Association Management Consultants in Houston, TX. Born and raised in Texas, Kendall now works as the online editor for DS News.
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