This Week in Real Estate
The volume of newly constructed homes is a key indicator of the real estate market. According to the Bureau of Labor Statistics This Week in Real Estate, the employment rate for construction workers is the strongest it has been since 2001. Below are a few highlights from the first week of August that influence our business:
* Consumer Confidence Rises Above Expectations in July. Consumer confidence gained more than expected in July, but consumers remained concerned about future economic growth. The Confidence Board's index increased to 127.4 in July, beating an estimated 126.5 by Reuters economists. Consumers reported better feelings toward the current economic situation; however, they were not optimistic about long-term growth. "Consumers' assessment of present-day conditions improved, suggesting that economic growth is still strong," said Lynn Franco, director of economic indicators at The Conference Board. Steve Odland, president and CEO of The Conference Board, said the report is positive and while consumers don't expect major changes in either direction for the index, they do expect continued growth.
Full Story... https://www.cnbc.com/2018/07/31/consumer-confidence-july.html?__source=realestate%7Cnews%7C&par=realestate
* Only One Generation of Americans Has Fully Recovered From the Housing Crash. The generation that likely had the most to lose during the crash in the housing market appears to have gained the most household wealth since 2007. During the economic downturn a decade ago, Generation X homeowners - born between 1965 and 1980 - experienced the largest decline in home equity, according to a new report by the Pew Research Center, a Washington, D.C.-based think tank. Home equity for that generation of homeowners fell 43% from $66,000 in 2007 to $37,600 in 2010. The median value of the financial assets owned by Generation X households fell 20% from 2007 to 2010. Since 2010, the median net worth of Generation X households has risen 115% and, since 2016, the net worth of a typical Gen X household had surpassed what it was in 2007 ($84,200 versus $63,400). “As of 2016, the median wealth of households headed by Boomers and the Silent Generation remains below 2007 levels, though their household wealth still exceeds that of Generation X,” wrote Richard Fry, a senior researcher at Pew.
* The Unemployment Rate Drops in July. According to the Employment Situation reported by the Bureau of Labor Statistics (BLS), in July, jobs increased by 170,000 and the unemployment rate edged down to 3.9%. The labor force participation rate remained unchanged at 62.9%. The release also indicates that the number of construction jobs rose by 19,000 in July, after the 13,000 increase in June. Job gains have averaged 214,000 a month this year, faster than the first seven months’ averages of 184,000 in 2017 and 181,000 in 2016. Residential construction employment was 2.82 million in July, broken down as 797,000 builders and 2 million residential specialty trade contractors. The 6-month moving average of job gains for residential construction is 9,450 a month. Over the last 12 months, home builders and remodelers have added 139,300 jobs on a net basis. Since the low point following the Great Recession, residential construction has gained 841,500 positions. In July, the unemployment rate for construction workers dropped to 4.4% on a seasonally adjusted basis, from the 5.6% in June. The unemployment rate for construction workers dropped to the lowest rate since 2001, as show in the figure above.
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