Jobs and The Cost of Housing

Guest Author: Matt Jolivette

Last week we counted our blessings with regard to the shape of the economy. This week we will talk about the release of the June jobs numbers which give us another reading regarding the health of the economy. Overall this reading was stronger than forecasts. Thus far this year, job growth has been solid, with just over one million jobs created in the first half of the year. This compares to 2.2 million jobs created in 2016, which puts the economy on track to match last year’s numbers. Despite strong jobs growth for the month, the unemployment rate rose to 4.4% last month, but that is not necessarily a bad thing, as it typically means that more long-term unemployed are re-entering the workforce.

Just as important as the jobs created, wages increased by 0.2% last month and 2.5% over the last year, which was slightly lower than economists expected. Higher wages are important, because they positively influence consumer spending for big ticket items.

For example, if wages do not go up as fast as the cost of housing, this provides a burden on renters and discourages home buying as well. Recently, home price data for April, as measured by the S&P CoreLogic Case-Shiller National Home Price Index, showed another record high — the fifth consecutive month of new peaks. Does that mean that housing will become unaffordable?

We caution you against reaching that conclusion. The First American Real Home Price Index currently shows that housing prices are still around 33% below their peak. To calculate the “real” cost of housing under the Real Home Price Index, incomes and mortgage rates are used to inflate or deflate house prices which are unadjusted for inflation in order to better reflect consumers’ purchasing power and capture the true cost of housing. It should be noted that lower interest rates do not directly benefit renters.

The message? As long as rates stay low, housing is still more affordable today than it was when peak prices were achieved a decade ago.

 

SEARCH FOR REAL ESTATE

There are links above to search for real estate.  I have a new website where you can search or you can use my mobile phone app as well. My website and mobile app provide you with access to all listings available on the RMLS™ system regardless of who the listing agent or brokerage may be. Listings are updated frequently throughout the day giving you the information you need, when you need it.

Thinking of Selling Your Lake Oswego Home?

Prices are increasing at a fast pace in Lake Oswego. Interest rates are still low but are increasing, and there is still a huge pool of buyer demand. I have ready, willing and able buyers ready to purchase your home. If you want to know the value of your home in today’s real estate market, please call me at 503-804-9685.

Moving to Lake Oswego?

Want to know more about Lake Oswego? I’d love to be your buyer’s agent, please give me a call at 503-804-9685.

I have worked in Lake Oswego as a Real Estate Broker since 1978 and have lived in Lake Oswego since 1988 and know all the neighborhoods! The real estate market is “hot” here in the Portland metro area and Lake Oswego. I am ready to assist you with all your real estate needs! “There is no substitute for experience.”

ALL ABOUT…..Lake Oswego Real Estate. Copyright 2008-2018. Betty Jung. All Rights Reserved. Use of this article, photos and images without permission is in violation of federal copyright laws.

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