The June jobs report from the U.S. Bureau of Labor Statistics (BLS) shows hiring is picking back up, adding about 850,000 new jobs overall while unemployment remained relatively flat at 5.9%, inching up only slightly. Job gains primarily occurred in leisure and hospitality, public and private education, professional and business services, retail trade, and other services—within real estate, jobs activity is split.
Within residential construction, general contractor and other related jobs increased by 15,200—a huge relief for a market that’s being squeezed by a lack of inventory.
Due to this boost in jobs, National Association of REALTORS® (NAR) Chief Economist Lawrence Yun said we can expect “more homes will be completed in the upcoming months and more housing inventory will be added.”
According to Mortgage Bankers Association SVP and Chief Economist Mike Fratantoni, the added jobs should benefit the pace of homebuilding; however, “insufficient housing inventory levels continue to slow what should be a stronger pace of home sales.”
The commercial sector tells a completely different story, with construction and contractor jobs declining by 11,700 in June, “marking a third straight month of declines, which assures no oversupply in the office and retail sectors,” according to Yun.
While June showed improvement overall, there’s still a long way to go for full recovery, experts say.
“A faster rate of job growth in June, which followed slower than expected growth in April and May, leaves the economy still 6.8 million jobs short of where it was in February 2020,” said Frantanoni. “However, the economy is certainly headed in the right direction. The country’s reopening is challenged by supply chain constraints and worker shortages in certain sectors, but we expect robust job growth to continue.”
According to Yun, “it could be another 12 months before we reach that high mark. More construction jobs and training will be needed to build more homes and for a federal government infrastructure spending boost.”
Regarding sales jobs within real estate, fierce competition continues. At the end of January 2021, there were 1.04 million homes on the market in the U.S.—a decrease of 26% YoY and the lowest number in almost 40 years. NAR, meanwhile, reports over 1.5 million members—creating a significant gap between the number of agents and the number of homes being sold.
While the BLS has predicted slow growth—2% compared to 4% growth for jobs in general—for real estate broker and sales agents jobs between 2019 to 2029, the current job climate may cause this to shift in either direction.
“There is a fair amount of churn in the job market right now as workers seek the best match, moving to jobs and sectors that are paying more due to the severe shortages in some segments of the job market,” said Fratantoni.
Will this churn lead to more job seekers flocking to real estate for higher paying opportunities, or will the competitive nature of the job be a deterrent? Job trends among younger generations will certainly have an impact, not only within real estate careers, but homeownership as well.
“Interestingly, the teen unemployment rate is lower now compared to the pre-pandemic,” said Yun. “Salute to them. Let’s hope that many are saving up and starting to invest.”
Liz Dominguez is RISMedia’s senior online editor. Email her your real estate news ideas to firstname.lastname@example.org.