January jobs report bodes well for housing

February 9th, 2015

The housing market will benefit from employment gains.

The U.S. Bureau of Labor Statistics has published the Employment Situation Summary for January, with figures boasting gains for nonfarm payroll employment.

While the unemployment rate was unchanged month over month at 5.7 percent, the number of nonfarm payroll positions jumped by 257,000. Employment gains are positive for the housing market and economy overall. If more people are stably employed, spending can improve, and more consumers may be encouraged to purchase a home. Trulia Chief Economist Jed Kolko agrees with that sentiment, according to HousingWire.

“Overall, this was a great jobs report for housing,” Kolko said. “All three measures were strong. For now, at least, the job market is a tailwind for housing.”

Not only does employment growth help consumers who are buying homes, but it also aids the construction industry. Many of the new positions created in January came from this sector, showing builders have more capital to increase production. This means the housing market may see an increase in new homes in the future, a feasible improvement considering the U.S. Census Bureau reported residential construction spending in the private sector went up 4.1 percent in 2014 compared to the previous year.