Jobs are one of the major components to the health of the U.S. economy, and they have a major effect on the real estate industry in a variety of capacities.
#1 - The job market plays a vital role in the rise and fall of short term interest rates. Over the past eight years we've seen rates remain at an all time low. For a large number of buyers this is a positive, as certain buyers are able to afford a home, they otherwise wouldn't be able to, if rates were at around the market average of 9%. The interest rates are one of the factors that speak to rather or not enough jobs have been created in order to call for an interest rate hike.
#2 - The job market is also meant to produce new wealth. When people are making higher wages it also benefits the housing market. More people are able to purchase a new home. Additionally, some people have enough money left over that spurs the need for them to either invest it or be taxed on that income. As a result, they find themselves purchasing a second home, vacation home, and/or investment properties.
#3 - A healthy job market also creates new business opportunities. The more people buy homes the more builders, brokerage firms, lenders, hardware stores, and others have to hire new help in order to support the demand of the market.
There are many issues that need to be addressed in this country but one that should be at the top of everyone's list is jobs. The job market is essential not only to the real estate market (which also plays a major role in the U.S. economy but we'll save that for another post) but also to the overall health of our economy.
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