Improvement in Jobs Good for Real Estate Market

Published by nora | Filed under Buyer / Seller Tips, Market Trends, Real Estate

Signs of improvements in the employment situation nationwide is good for the real estate market, particularly the residential sector. In February, the unemployment rate fell to 8.9 percent, the third consecutive month it fell since December last year.

In November last year, the jobless rate worsened further to 9.8 percent from the October rate of 9.6 percent, and then it started to improve in December when finally it dropped to 9.4 percent. It posted a big improvement in the first month of 2011 when it continued to drop to 9 percent.

Since jobs are among the primary sources of money for mortgage payments, any improvement in employment means a rise in the number of people who will seriously consider finally buying a home.

In February, the number of jobless persons dropped to 13.67 million from 13.86 million in January. As a result, the number of employed Americans surged to 139.57 million in February, up from 139.32 million in January.

The nonfarm industries which posted the most increases in jobs in February were construction, manufacturing, trade, utilities and transportation. It’s understandable that retail trade posted the highest number of job losses because many consumers stayed away from shopping in their effort to save money.

In January, 16 states posted significant year-over-year improvements in their unemployment rates, with Michigan enjoying the biggest over-the-year drop of three percentage points from 13.7 percent in January last year to 10.7 percent in January this year. Illinois was second with a decrease of 2.2 points from 11.2 percent in January 2010 to 9 percent in January this year. These positive changes are expected to cause positive ripples that would push up the real estate market.

Over the month, the states which achieved the biggest improvements in their unemployment situations were Nevada, which posted a 0.7-percentage point drop, and Indiana, Michigan and South Carolina, each posting a 0.4-point drop. Jobless rates also fell by relatively significant points in Pennsylvania, Maryland and Nebraska.

Despite Nevada’s positive change, it remained on top of the state jobless rate chart in January. Its 14.2-percent rate was still the highest among states, with California following with 12.4 percent, and Florida third with 11.9 percent.

The states with the lowest jobless rates in January were: