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Construction Sector Offers Silver Lining in Disappointing Jobs Report
EXCERPT:
The economy added just 88,000 jobs in March, a disappointing reversal given solid gains in January and February, and well below the 193,000 new jobs economists predicted for the month.
But there is one sector that’s heating up, even as other industries suffer the side effects of sequestration and squabbles in Washington: residential construction.
The homebuilding industry, beaten down during the housing bust, is benefiting from the overall tight inventory of homes for sale and the rush of would-be homebuyers to take advantage of record-low mortgage rates. Housing starts—around 917,000 in February—are still much lower than the 1.5 million economists say is closer to normal, but still almost 30 percent above construction levels seen this time last year, fueling job creation in the industry.
According to the Bureau of Labor Statistics, residential construction jobs increased almost 4 percent year over year, significantly faster job growth than the overall employment increase of about 1.4 percent.
The trend reflects “that housing is now a critical part of the economic recovery,” Trulia chief Economist Jed Kolko, wrote in a post Friday.
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Ha. -Of RENTAL UNITS.
Nobody can afford to buy a house.
Mrs. Gamecock and I are in the process of building a house, our first.
Because of my job it never made sense to buy, but I have a new found stability so we are taking the plunge
And to whom are they going to sell them to?
“Residential construction shot up significantly in March as homebuilders broke ground on the most multi-family homes in seven years, a report from the Commerce Department showed Tuesday.”.........”Builders are scrambling to respond to heightened demand for rental units, which has been credited with most of the gains seen in the housing starts in recent months.....”
Translation: Minus very good job growth, willingness to buy single family homes is not growing much (less costly to end a one or two year lease than risk forecslosure on a 30 year mortgage), so more people looking for a residence are more willing to rent than buy, which signals capital investors not to invest to build homes, they’re investing in building apartments.
But existing home sales are also seeing a lot of investor buying to rent over primary residence buyers in many markets.
The increase was in multi-family units according to other news that showed important information in first paragraphs of articles. Have fun with those rentals. Enjoy the slide.