More Jobs and Better Pay Are Sustaining Buyer Demand

Some “experts” continue to predict a coming recession. But the economy has been remarkably resilient. Why? One reason is employment and wages have stayed strong. Let’s look at the latest information on each one and why both are good news if you’re thinking about selling your house.

More Jobs Are Being Created

Instead of facing the job losses typical of any recession, the economy has been growing and adding jobs. According to the Bureau of Labor Statistics (BLS), 187,000 jobs were created in July, which is up from the 185,000 created in June. That means more people are finding work. In fact, so many jobs are being added that the unemployment rate is far lower than the long-term average of 5.7% (see graph below):

A low unemployment rate means that most people who want to work are finding jobs. When people have jobs, they have steady incomes – and that can help set them up to consider homeownership.

People Are Making More Money

And data also shows hourly earnings have been going up pretty steadily over the past few years (see graph below):

When wages rise, people have more money that they could save or use toward buying a home. This increase in income helps offset some of the affordability challenges in the market today. Affordability depends on three main factors: wages, home prices, and mortgage rates. With higher home prices and mortgage rates right now, Builder Online summarizes how growing wages can help: “Many of those employed have saved money over the last few years and used those funds towards a down payment on a home.”

If you’re thinking about selling your house, a strong job market, growing wages, and the resulting buyer demand is fantastic news. It means there’s a larger pool of potential buyers out there who are in a position to pursue their dreams of homeownership.

Please keep in mind that we have begun the national election process. Many candidates will be painting the economic picture as dark to show how they can brighten things up. So, it’s important to pay attention to what the actual experts in the field — who have no political points to gain — are saying.

Mari has just returned from the Tom Ferry Success Summit in Dallas. During the three days of presentations and meetings, speakers focused on technological changes to our industry, as well as a topic that we have written about many times: why so many sellers and buyers are frozen in place.

One constant theme at the Summit involved those headlines late last year predicting a market crash. It never happened. Still one out of four people still believe there will be a crash in spite of all the evidence to the contrary.

It’s our job as your friends who work in the real estate industry to continue to offer the most current and accurate information available. Many of you are living in homes that you would be moving on from otherwise — too small, too big, etc. — were it not for concerns about the health of the market and interest rates. (Which Steve Harney, our industry’s leading economic thinker, said are virtually impossible to predict.)

Remember: the actual data shows that hundreds of homes are sold every day across the country.

Shouldn’t yours be one of them??

Mari and Hank

508-360-5664 – [email protected]