There’s been talk about a recession for quite a while now. 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 and why both are good news if you’re considering selling your house.
More Jobs Are Being Created
The economy has been growing and adding jobs instead of facing the job losses typical of any recession. According to the Bureau of Labor Statistics (BLS), 187,000 jobs were created in July, up from the 185,000 created in June. That means more people are finding work. 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 most people who want to work are finding jobs. When people have jobs, they have steady incomes, which can help set them up to consider homeownership. “The unemployment rate rose to 3.8 percent from 3.5 percent in July, likely for a good reason: More people started to look for work. The job growth figures for June and July were revised down by a combined 110,000 jobs, contributing to a picture slightly weaker than it previously appeared,” as the New York Times reported.
People Are Making More Money
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 to save or use to buy a home. This increase in income helps offset some of the affordability challenges in the housing 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:
“The housing market has been a beneficiary of the strong economy and labor market. Many of those employed have saved money over the past few years and used those funds toward a down payment on a home.”
“Still, there is no sign of an imminent recession that would result in widespread joblessness. Additionally, the August gain was significantly above the number of jobs that the market requires to absorb the flow of people into the labor force. Hourly earnings rose 4.3 percent over the month, slightly less than expected and mostly level with the pace of wage growth since the spring”, as the New York Times reports.
If you’re considering 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.
Key Takeaway
With more jobs and rising wages creating eager buyers, much is in your favor. Let’s connect so you have someone who can guide you through selling your house, from setting the right price to getting your home ready to show.
