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October Job Gains Pushing Housing Toward Recovery

Employment Housing Market Recovery [1]The labor market is helping to boost housing recovery despite a weak virtuous cycle [2] between the jobs and housing recently, according to research released by Trulia [3] earlier this week.

The percentage of employed 25- to 34-year-olds reported in October (76.2 percent) is still slightly below its pre-housing bubble rate (78 to 80 percent) but is still at its highest level since 2008, which bodes well for the housing market, since 25 to 34 is the prime age for household formation, according to Trulia. Having a job made a big difference in housing among that age group, according to 2014 Census data – only 12 percent of 25- to -34-year-olds with jobs lived with their parents, as opposed to 21 percent of those in that age group who don't have jobs. The Bureau of Labor Statistics [4] recently announced that the overall U.S. unemployment rate hit a new six-year low [5] in October.

Another key to housing recovery is job growth in "clobbered metros" (areas affected the most by the housing bust), according to Trulia. Job growth was reported a 2.0 percent year-over-year increase in September, which was slightly ahead of the national rate of 1.9 percent for that same period. The clobbered metros with the highest rate of job growth year-over-year in September were Orlando (3.7 percent), Miami (3.4 percent), Jacksonville (3.3 percent), and Las Vegas (2.8 percent). The highest rate of job growth among the top 100 metro areas (clobbered or no) was in Houston, at 4.3 percent. The lowest rate was in Columbus, Ohio, at 0.7 percent, according to Trulia.

Residential construction employment, which is an indicator of whether or not jobs are helping the housing market, saw their lowest monthly gain in October (8,000 jobs) since May 2014, according to Trulia. Year-over-year in October, however, residential construction job growth (6.0 percent) was way ahead of the overall national job growth rate for that period (1.9 percent). This may seem like a slow growth rate when compared to the 19.5 percent increase in the number of units under construction that was reported for September, but upon further examination [6], the rate of growth for employment in residential construction is high relative to construction activity, Trulia reported.