Will a burst of job creation lift housing?

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So far, 2015 is shaping up to be a good year for job hunters. In fact, the labor market hasn’t been this strong since the first half of 2006, when the housing market was soaring. But new jobs aren’t enough to give a lift to housing. Stable employment and increasing wages matter most over the long term.

May’s employment report was the best in five months, posting 280,000 new jobs. On average, the economy has added 207,000 jobs a month over the last three months and payrolls have increased 2.2 percent from the same time last year.

In the midst of this labor recovery it’s easy to wonder what affect job growth is having on housing. In Denver, the fastest housing market in the country, employment has increased from a year ago a full percentage point above the national average, to 3.2 percent. A typical home in Denver sells within five days; 75 percent of listed properties are off the market in less than a week. That’s fast.

Seattle has seen jobs increase nearly 4 percent from last year, and the housing market is feeling the love there, too. The typical home sells in less than two weeks and supply is firmly tilted towards sellers. Seattle has just two months of inventory to meet buyer demand; six months is considered a balanced market.

In contrast, the slowest real estate markets are also where employment growth has trailed the national average. Total employment is up a mere 0.9 percent in Allentown, PA from a year ago, less than half the national average. Homes typically stay on the market for 96 days and less than 2 percent sell in two weeks. There are enough homes for sale in Allentown to meet demand for more than a year.

Then there’s Las Vegas, a relatively healthy 3.2 percent increase in employment wasn’t enough to offset the 7.1 percent unemployment rate. The take-away? Job growth alone isn’t enough to trigger a robust housing market.

April Jobs and Housing Data

Unemployment Rate Employment Growth,
YOY Percent Change
Days on Market Off Market in 2 weeks Months of Supply
National 5.5% 2.2% 31 34% 4.5
Fastest Markets
Denver 4.2% 3.2% 5 73% 1.9
Seattle 3.9% 3.8% 9 62% 2
Austin 3.0% 3.1% 11 56% 3.4
Oakland 4.0% 3.7% 12 68% 1.7
Dallas 3.7% 3.7% 14 52% 3.2
Slowest Markets
Allentown 5.0% 0.9% 96 2% 12.7
Long Island 5.6% 1.4% 86 6% 12.6
Indianapolis 4.3% 2.8% 72 2% 6.6
Las Vegas 7.1% 3.2% 67 6% 5.8
Philadelphia 5.1% 1.2% 63 14% 8.6
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nela-richardsonredfin-com

Chief Economist

Nela leads Redfin’s housing market research team on data reports that help Redfin customers make informed choices. She comes to Redfin from Bloomberg LP, where she served as a senior economist with Bloomberg Government. She also served in past roles in the mortgage industry, capital markets and financial policy. Redfin is a full-service real estate brokerage that uses modern technology to make clients smarter and faster. For more information about working with a Redfin real estate agent to buy or sell a home, visit our "Why Redfin?," page.

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