Some good news pending for the housing market

by Laura Ehrenberg-Chesler on March 28, 2016

in Employment,housing

Here is some potential good news for the housing market from today’s edition of our research from Ed Yardeni.

Record job openings are bringing discouraged workers who dropped out of the labor force back in. Over the past five months, the labor force increased 2.0 million. At the same time, the household measure of employment rose 2.1 million. The labor force participation rate was 62.9% during February, well below its record high of 67.3% during the first four months of 2000. If it increased just two percentage points to 64.9%, that would swell the labor force (and probably employment too) by 5 million workers!

Such an improvement in the labor market would likely boost not only consumer spending but also the residential investment component of real GDP. The latter has been on an uptrend since Q3-2010, led by construction of multi-family rental apartments. Rapidly rising rents combined with the aging of the Millennials could combine to drive single-family new home sales and starts higher.”

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