SmartMoney Blogs

Real-Time Advice
Our real-time advice on how market shifts and news impact you and your money

What the Jobs Numbers Mean for Real Estate

The most recent job numbers may be disappointing in more ways than one: Payroll numbers will need to more than double their current growth rate before a full housing recovery can occur, economists say.

Andy Dean Photography / Shutterstock.com

Recent weeks have seen some upbeat news about the housing market. According to data released this week by CoreLogic, for example, home prices increased 3.8% in July compared with a year prior — the biggest year-over-year increase since August 2006.

But a lagging workforce is likely to hold back the recovery in home sales. Today’s jobs report indicates that growth remains sluggish: U.S. nonfarm payrolls increased by 96,000 in August, according to seasonally adjusted data released by the Labor Department. Economists expected a gain of 125,000. While the unemployment rate fell to 8.1%, down from 8.3% in July, that was largely because some people stopped looking for work.

Beth Ann Bovino, deputy chief economist at Standard & Poor’s, says roughly 200,000 jobs have to be added per month through 2013 in order for the housing market to fully bounce back. And the unemployment rate will need to drop to at least 7%, she says: “[Current] numbers won’t push the recovery into full gear — we’re nowhere near that.”

In normal times, strong job growth leads to a strong housing market. The correlation is straightforward: The employed have income to save for a down payment and to qualify for a mortgage. By buying homes, they boost sales and help raise home values. A virtuous cycle can also kick in: Stronger demand for homes can create more construction jobs, helping lower the unemployment rate while creating more potential home buyers.

In some cities, real estate has recently improved as the unemployment rate has declined. In the Phoenix metro area, the unemployment rate hit 7.5% in July, according to the latest (not seasonally adjusted) data, compared with 8.7% a year prior and 9.6% two years prior. Recent home sales activity has been on the upswing: The median sales price of existing single-family homes in this area reached $148,400 during the second quarter of 2012, up 14.2% from the previous quarter and up 29% from a year prior, according to the National Association of Realtors. A pickup in sales has also increased housing starts by 52% (that’s when ground is broken to begin new construction) from last year, according to Metrostudy, a housing market research and consulting firm.

Some housing markets are currently deviating from previous norms, strengthening despite a weak labor market, says Brad Hunter, chief economist at Metrostudy. That’s largely due to investors who’ve been snatching up distressed properties at rock bottom prices and buyers with enough cash to buy homes outright. All-cash sales, which are popular among investors, accounted for 27% of existing-home sales transactions in July, slightly down from a year prior but substantially higher than the historical average of roughly 10%, according to the NAR. Home buyers who’ve remained employed through the recession have also jumped in to take advantage of low home prices and mortgage rates, Hunter says.

While this demand has boosted sales, that momentum could fall short if new buyers don’t enter the market soon. “To sustain the uptrend, we’re going to need jobs,” says Hunter. And even when job numbers eventually improve, experts say there will be a lag time until the newly employed start buying homes. Hunter says it could be a year until they have enough of a work history to qualify for a mortgage, or longer if they also need to improve their credit.


We welcome thoughtful comments from readers. Please comply with our guidelines. Our blogs do not require the use of your real name.

Comments (5 of 8)

View all Comments »
    • By WebOsPublisher

      ThreatExpert Submission Report
      body a color: #505050; text-decoration: none body a:hover color: #c00000; text-decoration: underline
      ThreatExpert Report
      Visit ThreatExpert web site
      |Close Report
      Submission Summary:
      Submission details:
      Submission received: 27 March 2012, 21:34:52
      Processing time: 11 min 8 sec
      Submitted sample:
      File MD5: 0x71EF4D9C4B1CB74D5573C1582C6E6847
      File SHA-1: 0x5775D946FBD886B20784F67567B33FD204B8A0DD
      Filesize: 1,812,188 bytes
      Summary of the findings:
      What’s been foundSeverity Level
      Creates a startup registry entry.
      Technical Details:
      File System Modifications
      The following files were created in the system:
      #Filename(s)File SizeFile HashAlias
      %CommonPrograms%\System Scheduler\System Scheduler on the Web.lnk
      503 bytes
      MD5: 0x2DA54071A1860ED4DE3047F05173B9C8SHA-1: 0x5399E7081D3296A3136FFCB5B0F47E708D468F39
      (not available)
      %CommonPrograms%\System Scheduler\System Scheduler.lnk
      682 bytes
      MD5: 0x0AB0BB71EA91015E2C4E596D5CB02F1CSHA-1: 0x63AF347EF2DD70ECA40B1E95CB79303A5C0A3372
      (not available)
      %CommonPrograms%\System Scheduler\Uninstall System Scheduler.lnk
      677 bytes
      MD5: 0x67A3B0F005CF18F1BA662BD7128B9143SHA-1: 0x2121E35F3AE2C428125585E2EE8E3A78708D25F2
      (not available)
      766 bytes
      MD5: 0x912D1673D00AF09594BA416A23FBCBEASHA-1: 0x1858AFA026D31E5BBDB0164D295ED769245A7C03
      (not available)
      80,856 bytes
      MD5: 0x18E639792D3767436AC6955EB60E4F54SHA-1: 0xE0B512CF108118AF5169946C7FBEE493443B13BF
      (not available)
      0 bytes
      MD5: 0xD41D8CD98F00B204E9800998ECF8427ESHA-1: 0xDA39A3EE5E6B4B0D3255BFEF95601890AFD80709
      (not available)
      87 bytes
      MD5: 0xFB9DCB0DF4431457D5454FD156AB918ASHA-1: 0xB8AF64AB430E0626632B4DCEB4EE7D828923664F
      (not available)
      9,813 bytes
      MD5: 0x0EB0DE3985F9B2197CEC927CF79FC385SHA-1: 0x264CFC918A4985865143A6E1776D6443CD9C6B72
      (not available)
      197 bytes
      MD5: 0xB790654DC67B068B5315066E3ADC4DABSHA-1: 0x0942BD903443ABECD609E60005EDB0D0ABFD7997
      (not available)
      127,488 bytes
      MD5: 0x3147687DB440F3C98B3A299C48AFE032SHA-1: 0x7F20D8826053F1ECDBE7E30FDA1EFEEF256F86E7
      packed with UPX [Kaspersky Lab]
      1,069 bytes
      MD5: 0xF1AF7DC1280C6F017B518CCAA9E46134SHA-1: 0x2FED339246741ABE9ECE19C65E4FCB174E6C8A90
      (not available)
      7,684 bytes
      MD5: 0x6160278A3C3651B1E9F103A93D67838DSHA-1: 0x9BD61044325947D4DF556D9E16A96477514DA730
      (not available)
      46,592 bytes
      MD5: 0x4C0A71705CC34D83485FC7AA5FECF65FSHA-1: 0xFE8F8DCDFDA5F47A98B08E592AE0F95BD75EF8CB
      packed with UPX [Kaspersky Lab]
      766 bytes
      MD5: 0xB2FCF86D697A86EE2A70959C8C90F4BFSHA-1: 0x493F9FD2958701AB53C4883CDD5AA9B4C2195696
      (not available)
      403,968 bytes
      MD5: 0xCCC63D977C105987EA6F608BAD317823SHA-1: 0x442CBC80651DB9ED51F26D313019109729B5A086
      (not available)
      53 bytes
      MD5: 0xB13BB004B11E5616431EADA48351ECC6SHA-1: 0x635F277DD4242662CE30BC82186200171A62D1DD
      (not available)
      175,616 bytes
      MD5: 0x52772B055325998D0E38F72695B0A253SHA-1: 0x34EA88D41F1E45916EA2A5225481CE21F052FB1E
      (not available)
      101,376 bytes
      MD5: 0xB01BA6DC7C46D6B3F9084CB3EAE69B90SHA-1: 0xF2E562373B4571D079D5D0DA723EA693A284D935
      (not available)
      138,240 bytes
      MD5: 0x2E2D565390BB5C07F96D7A0E56CDE0BASHA-1: 0xC10BEC2E9320483626E30483ACC4855D0BA860CC
      (not available)
      5,574 bytes
      MD5: 0xADA42BC6623FADFCEEA36FFB4F030E5CSHA-1: 0x8AB5485F982952863E6244C84116E742483BE772
      (not available)
      682,266 bytes
      MD5: 0xC0091978F09E9F943AE0D48D6DDF8F99SHA-1: 0xAA713220A1F489B79CFC84647F8F852FCAD0920C
      (not available)
      240,794 bytes
      MD5: 0x1011D3F685773F63FA4CAC6D0814B42CSHA-1: 0x0945E34E0BCBB86EF9DDD8F6BBA004730DF30704
      (not available)
      1,947 bytes
      MD5: 0xAF97142B01C543018A377517B9B8896ESHA-1: 0x16BFFE82CAE2526F5321C4C2377A51FF49597650
      (not available)
      98,304 bytes
      MD5: 0xD75293BFEB2C85D2041EF7832CB5E1D9SHA-1: 0x95497AAD6AF9897CF2426CF8E94A9B170944A762
      (not available)
      197,284 bytes
      MD5: 0x2C54A0A586E94D0F5347417D62F9AFA5SHA-1: 0x0FD021DE1AE78466FF789F07197725DFEAE970FB
      (not available)
      [file and pathname of the sample #1]
      1,812,188 bytes
      MD5: 0x71EF4D9C4B1CB74D5573C1582C6E6847SHA-1: 0x5775D946FBD886B20784F67567B33FD204B8A0DD
      (not available)
      %CommonPrograms% is a variable that refers to the file system directory that contains the directories for the common program groups that appear on the Start menu for all users. A typical path is C:\Documents and Settings\All Users\Start Menu\Programs (Windows NT/2000/XP).
      %ProgramFiles% is a variable that refers to the Program Files folder. A typical path is C:\Program Files.
      The following directories were created:
      %CommonPrograms%\System Scheduler
      Registry Modifications
      The following Registry Key was created:
      HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Windows\CurrentVersion\Uninstall\Windows Scheduler_is1
      The newly created Registry Values are:
      WScheduler = “c:\PROGRA~1\SYSTEM~1\WScheduler.exe /LOGON”
      so that Scheduler.exe runs every time Windows starts
      [HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Windows\CurrentVersion\Uninstall\Windows Scheduler_is1]
      Inno Setup: Setup Version = “5.1.9″
      Inno Setup: App Path = “%ProgramFiles%\SystemScheduler”
      InstallLocation = “%ProgramFiles%\SystemScheduler\”
      Inno Setup: Icon Group = “System Scheduler”
      Inno Setup: User = “%UserName%”
      DisplayName = “System Scheduler 3.82″
      UninstallString = “”%ProgramFiles%\SystemScheduler\unins000.exe””
      QuietUninstallString = “”%ProgramFiles%\SystemScheduler\unins000.exe” /SILENT”
      Publisher = “Splinterware Software Solutions”
      URLInfoAbout = “splinterware.com”
      HelpLink = “splinterware.com”
      URLUpdateInfo = “splinterware.com”
      NoModify = 0×00000001
      NoRepair = 0×00000001
      InstallDate = “20120327″
      All content (“Information”) contained in this report is the copyrighted work of Threat Expert Ltd and its associated companies (“ThreatExpert”) and may not be copied without the express permission of ThreatExpert.
      The Information is provided on an “as is” basis. ThreatExpert disclaims all warranties, whether express or implied, to the maximum extent permitted by law, including the implied warranties that the Information is merchantable, of satisfactory quality, accurate, fit for a particular purpose or need, or non-infringing, unless such implied warranties are legally incapable of exclusion. Further, ThreatExpert does not warrant or make any representations regarding the use or the results of the use of the Information in terms of their correctness, accuracy, reliability, or otherwise.
      Copyright © 2012 ThreatExpert. All rights reserved.


    • By WebOsPublisher

      The place to see the reach of your twitter accounts and hashtags!
      Welcome to Twitwheel!
      /* place css box model fixes for IE 5* in this conditional comment */
      .thrColFixHdr #sidebar1 width: 180px;
      .thrColFixHdr #sidebar2 width: 190px;
      /* place css fixes for all versions of IE in this conditional comment */
      .thrColFixHdr #sidebar2, .thrColFixHdr #sidebar1 padding-top: 30px;
      .thrColFixHdr #mainContent zoom: 1;
      /* the above proprietary zoom property gives IE the hasLayout it needs to avoid several bugs */
      body font-family:serif; font-size:11px; height:100%; overflow:auto; background-color:#; background-image: url(‘a0.twimg.com/images/themes/theme15/bg.png’); background-repeat:repeat; background-attachment:fixed;
      a.tweetLink, span.tweetLink font-weight:bold; color:##0084B4;
      span.tweetLink:hovercolor:#666666; text-decoration:underline;
      (function(d, s, id)
      var js, fjs = d.getElementsByTagName(s)[0];
      if (d.getElementById(id)) return;
      js = d.createElement(s); js.id = id;
      js.src = “//connect.facebook.net/en_US/all.js#xfbml=1&appId=101760166583900″;
      fjs.parentNode.insertBefore(js, fjs);
      (document, ‘script’, ‘facebook-jssdk’));
      [CLOSE X]
      What is Twitwheel?
      Twitwheel simplifies twitter so you can follow friends and hashtags easier. Login and enjoy!
      Twitwheel simplifica Twitter, haciendo mucho mГЎs fГЎcil el seguimiento de amigos y etiquetas. ВЎPreubalГі y disfruta!
      Twitwheel simplifica o twitter para que vocГЄ acompanhe seus amigos e hashtags facilmente.
      ツイットウィール(Twitwheel)とは、ツイッター(Twitter)のハッシュタグとフレンドのフォローを分かりやすくするプログラムです。 ログインして使ってみてください!
      Privacy matters. We don’t spam or sell your info.
      Tweet us a translation of this for your language @talkwheel. Thanks!
      Make your Facebook Fan Page Fun
      Get Talkwheel to increase Facebook fan engagement 80+% for free! No signup necessary.
      Get it Now
      Want better conversation? Get Talkwheel for Facebook.
      Get it Now!

      var js,fjs=d.getElementsByTagName(s)[0];if(!d.getElementById(id))js=d.createElement(s);js.id=id;js.src=”//platform.twitter.com/widgets.js”;fjs.parentNode.insertBefore(js,fjs);
      Get your ‘See It’ button here

      powered by

      Login to Tweet
      Get Free Stuff!

      Followers: Following:
      TwitWheel searches recent messages to and from a user. We were unable to find any public messages for oliabhka9910. Try searching for a different user.
      Love twitwheel? Contact iwantone@talkwheel.com for a free wheel conversation platform for your website, Facebook, or blog!–
      3 million people use Talkwheel’s Twitwheel, be the first to use our free mobile app. Download now!

      Topics Tweets About

    • Just having a job does not qualify you for a home loan. Credit score needs to be at least the minimum, satisfactory credit history, debt ratios need to be below what the credit underwriter requires, loan to values have to meet the lenders criteria, job stability, type of employment, solid income verification, cash down payment and home appraisal that meets lenders internal approval. The new lending standards have gone back to what they used to be before the substandard real estate market bubble.

    • U3 is not an accurate estimate of unemployment. There are many people who have given up and do not get counted. Another way to look at unemployment is to count who is actually employed. Google for “Unemployment Kondratieff Wave” to see an employment chart.

About Real-Time Advice

  • How breaking news — in the markets, Washington, and around the world — affects you and your money. Have a question about how current events may change your financial future? Email us at ask@smartmoney.com.