Tag Archives: Labour economics

Point to Ponder: The Impact The Job Market Has On The Housing Market

10 Feb

Being unemployed, under-employed, or afraid of losing a job is never easy. One of the first things many people do is minimize their spending. Certainly, the last thing on their minds is making a major purchase like a house.

Here are three key points that shed light on specific ways that the labor market influences the housing market.

Home Prices: A more secure employment market can help home prices stabilize, as fewer people are at risk of losing their homes to foreclosure. In addition, improvements in the labor market often open the door for more first-time homebuyers to join the ranks of homeowners. This can eventually help home prices improve.

Home Size: When someone is paid a good salary, one of the things they often think about doing is purchasing a larger home.

Home Location: When the labor market is thriving, an employer may even have to lure in people who live outside the local area to take a job. This is one of the reasons housing markets are so localized. One state, city, or community might have a much better job market than a neighboring one. That’s why it’s very important to understand the labor situation in your own state and city in order to really get a feel for the health of the housing market there.

The bottom line to remember in 2012 is that all real estate markets are local…and that means that there can be enormous variations across the country. In areas where employment is struggling, the housing market may continue to struggle as well. But employment is improving in many parts of the country, which also means the housing market in those areas will follow suit.