Job Growth and Lower Mortgage Rates Support Single-Family Construction
Job growth and lower mortgage rates are the positive economic variables that will support near-term growth for single-family construction. In June, 224,000 jobs were added to the nation’s workforce, as the unemployment rate held at just 3.7%.
However, the low unemployment is further aggravating the scarcity of skilled laborers. In May, there were 369,000 unfilled jobs in the construction sector.
Likewise, lower mortgage interest rates – averaging near 3.8% for a 30-year fixed-rate, according to Freddie Mac – are helping to promote housing demand, although on a limited basis.
For example, pending sales of existing homes increased 1.1% in May. However, those sales were still down on a year-over-year basis – the 17th straight month of such declines, largely due to ongoing housing affordability constraints.