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Housing Sector Drives Job Losses

The national unemployment rate increased to 8.2% in May, led by job losses in the housing sector, which remains among the hardest hit by the recession.

The job market in virtually every field connected to real estate continues to suffer, data shows. Construction employment fell by 28,000 last month, according to data released by the Bureau of Labor Statistics Friday. Despite a 30% increase in housing starts in April from a year prior, the number of people employed in home building hasn’t budged much at roughly 565,000. “There’s been a massive fallout with respect to employment in all housing-related sectors,” says Stuart Gabriel, director of the Ziman Center for Real Estate at the University of California, Los Angeles.

Other parts of the housing sector are also struggling. There were roughly 58,000 mortgage and loan brokers on the payroll in April, barely unchanged from a year ago, according to the BLS. Meanwhile, the number of home appraisers declined 4% to 86,800 in 2011 from the year prior, according to the latest data from the Appraisal Institute.

The main reason for the poor real estate-related employment picture is the steep drop in home sales since the peak, experts say. The number of realtors hit a peak of 1.36 million in 2006 but has steadily fallen to 1.01 million. Similarly, construction jobs were slashed in half following 2006, with new home sales hitting a 51-year low last year.

Analysts say real estate jobs are a barometer for the health of the housing market – and the economy as a whole. A sizeable pickup in employment will have to occur before it’s clear that the housing market has fully recovered, says Gabriel. Employers in the industry are “reticent to place big bets until they see a more retrenched recovery specific to housing and the broader economy,” he says.

But those declines may have been exacerbated by the stricter industry regulations imposed to protect consumers from the abusive practices prevalent prior to the housing crash, experts say. For instance, would-be state-licensed mortgage originators now have to pass a federal exam and undergo background checks, and those barriers have likely resulted in fewer people entering or continuing on in the field, says Bill Matthews, president of the State Regulatory Registry, which operates the mortgage originator licensing and registration system.

These drops in employment have been a mixed bag for home buyers and sellers. Staffing cutbacks in the mortgage sector have contributed to longer delays. But the shedding of housing professionals may have also helped consumers. Most of the people who’ve left the industry were fairly new to it with little experience, says Mark Goldman, a real estate lecturer at San Diego State University and senior loan officer at C2 Financial Corp, a mortgage brokerage firm. According to data from the NAR, realtors in the workforce this year have a median experience of 11 years, up from seven years in 2007.

Here are four housing fields still losing jobs and the impact the lower staffing is having on home buyers and sellers.



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