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Posted December 12, 2014

Labor Gains Positive Sign for Housing

An improving labor market will help support growth in home building in 2015, notes David Crowe, Chief Economist for the NAHB. "And the November report offered the most positive jobs data in some time."  


According to the Bureau of Labor Statistics, 321,000 jobs were added  in November, and the numbers for September and October were revised up by a combined 44,000. 

This is good news for the housing market, a key driver for the economy, but there are a couple of "headwinds," he noted. First, the ongoing lack of labor as construction activity expands. Second, access to capital,although a quarterly NAHB survey on construction lending indicated easing lending conditions during the third quarter. 

And home building continues to expand. Census construction spending data reveals that in October, all three components of the residential construction industry showed growth. The pace of single-family spending (put-in-place) was up 1.8%, while multifamily (1%) and improvement spending (0.6%) also posted gains. On a three-month moving average basis, from October 2013, the annualized pace of total private residential construction spending has increased 1.3%.

Single-family spending will continue to grow in 2015, as pent-up housing demand is unlocked due to improved households balance sheets and ongoing growth in the labor market.

Click here for Dr. Crowe's article

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