Economists' Outlook

Housing stats and analysis from NAR's research experts.

Instant Reaction: Jobs, February 5, 2021

The overall job market is still weak, with only 49,000 net new job creations in January following a 227,000 net loss in December. The very first stimulus from last spring is dwindling and virus cases are rising. Around 10 million jobs are still needed to get us back to pre-pandemic levels. Thankfully, the late December stimulus package, including the $600 check to most Americans, should help with job growth soon. A larger Biden stimulus is also on the way. By summer, around half of Americans could be vaccinated and another quarter by autumn. Herd immunity is in sight, and a possible return to normal everyday activity. Given the massive savings of stimulus money to date, the unleashing of that into spending will greatly boost job recovery in the second half of the year.

The bond market is acting up due to a larger budget deficit and the printing of money. Nonetheless, the rise in mortgage rates will be only in decimal points and not enough to derail strong home buying interest. With such strong demand, we need more supply. Jobs related to home building had a mixed outlook, with 3,700 more in construction but 4,200 fewer jobs as contractors. To assure no choke points in the future, more localities should be providing trade skills to those who are currently unemployed so more construction activity can take place in the future. More housing inventory is needed for sure.

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