Strong Aggregate Jobs Numbers as Housing Read-Throughs Stay Positive

Friday, February 21, 2020 by Zelman & Associates

Following December’s shortfall to headline expectations, the January employment report rebounded favorably on an overall basis and factors most influential to housing remained positive. Notably, year-over-year job growth for young adults outpaced older age cohorts for a fourth consecutive month, while entry-level wage growth has remained strong – both positive undertones for incremental housing demand into 2020.

In 2019, national job growth of 1.4% was driven by 20-34 year olds at 1.7% versus 1.3% for older cohorts. The dynamic in January was similar, with 1.4% overall job growth led by young adults (1.6%) versus older cohorts (1.3%).

In addition, wage trends amongst potential entry-level homebuyers, which we gauge using production and non-supervisory employees, remain positive. In January, year-over-year wage growth of 3.3% ticked higher from 3.2% in December, and we believe the outlook remains favorable for continued uplift in 2020.

The favorable employment backdrop for young adults remains a positive for household formation and incremental housing demand, particularly as millennials reach their homebuyer years.

Strong Aggregate Jobs Numbers as Housing Read-Throughs Stay Positive

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