Eye on the EconomyHiring Gains a Positive for Housing

October 15, 2014

eyeonhousing.org

The Employment Situation2

• 248,000 net jobs were created in September

• August gains revised from 142,000 to 180,000

• July gains revised from 212,000 to 243,000

• Unemployment fell from 6.1% to 5.9% in August

• A quarter was due to a drop in the size of the labor force

• Read more here

JOLTS3

• In August open jobs decreased in construction sector

• Due to an increase in hiring during the summer

• Declined from 139,000 in July to 115,000 in August

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JOLTS4

• Current employment is now 2.307 million

• 678,000 builders

• 1.63 million residential specialty trade contractors

• Home builders and remodelers added 11,800 positions last month

• Residential construction has added 129,000 jobs over the last year

• 323,600 jobs have been added to the sector since low point

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Apartment Absorption Rates5

• Non-seasonally adjusted three-month absorption for Q1 of 2014 completions are at 62%

• Absorption rates have risen since coming out of the recession

• Rates have been steady since 2011

• At the start of 2014 the three-month absorption rate for for-sale multifamily condos was 80%

• Slightly lower than 2013’s 82%

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Federal Open Market Committee Minutes6

• The Fed will likely end its asset purchase program

• Quantitative easing

• Federal funds rate expected to remain low

• NAHB is forecasting the first increase for the third quarter of 2015

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Mortgage Lending Standards7

• Low interest rates are helping housing demand but credit remains difficult to get

• NAHB survey indicates that 55% of single-family builders report lending standards as “tight” or “very tight”

• 83% of respondents had lost at least one sale in the last six months due to customer’s inability to qualify for a mortgage

• Average share of loss was 9.7%

• Suggests about 18,700 lost new home sales

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Other Analysis8

• 2013 regional new home characteristics

• Price per square foot differences

• Custom home market shares

• Foundations types

• Average real estate tax analysis

• Analysis of Energy Star-rated appliance ownership