Housing & Labor
We at Prominent Escrow, along with the escrow, mortgage and real estate industries are gladden by the fact that the overall housing industry is seeing sustained positive growth. But how does this connect with the overall national picture?
According to the Mortgage Bankers Association’s (MBA) Economic and Mortgage Finance Commentary (January 2013), the US housing market is one of “the few bright spots” in the general economic outlook, as home sales continue an upward trend, with home purchase applications showing steady year over year growth, and refinance activity currently holding firm.
The MBA says that housing starts in December reached the highest level in four years. Their data shows that both single-family and multi-family housing starts finished 2012 with significant increases. Single-family starts saw a 23 percent increase in 2012 while multi-family housing starts increased 38 percent for the year. This trend is likely to continue into 2013, says the MBA, as housing permits should continue in a positive growth direction.
A key ingredient for a healthy economy is the labor market. The MBA report states that non-farm payroll employment in December grew by only 155,000 jobs. This figure falls short of the 200,000 jobs per month employment growth that would clearly indicate sustained labor market improvement, this according to Fed officials.
December saw no improvement in the official unemployment rate, which remained unchanged at 7.8 percent, and has been in that range for over four months. The unemployment rate remains at its lowest levels since 2009. Another telling figure relative to the labor market is that the labor force participation rate is at the lowest levels since 1983, and has shown little sign of improvement for some time. The labor force participation rate is only 63.6 percent and remained below 64 percent for all of 2012.
Additionally the MBA report says that the U6 measure of underemployment was unchanged at 14.4 percent. Data within the U6 measure show workers who have sought temporary work for economic reasons dropped in December, the third straight monthly decline. On the other hand, “workers who are marginally attached to the labor force or who are discouraged in their job search have increased significantly for two months.”
The MBA says, “The unemployment rate will decrease slowly, moving to 7.6 percent in 2013 and 7.0 percent in 2014, as labor force participation remains low and job growth remains in the 150,000 jobs per month range.”
Clearly what is needed is for government policies and business enterprise to work on solutions that will put Americans back to work, and with jobs that can sustain the great American Dream. See below for the full commentary.