One Million New Jobs…That Was The Hope.

Two months ago the US added 916,000 new jobs and unemployment dropped to 6%, there was a celebration and many pontificated how great it would be if one million people returned to work every month. How fast would we return to normal. The following month did not produce a million new workers and the unemployment rate went up instead of down. The month of May was a slight let down as well. The markets estimated 671,000 new job, but we got 559,000, dropping the unemployment rate from 6.1% to 5.8%. So… what does this mean?

The stock market futures were positive on the news, thinking this would slow down the Federal Reserves move to start tapering. The Fed has two mandates..aspire for full employment and manage inflation. This unemployment number overall is not good or bad.. it’s as neutral as it gets.. a bit goldilocks for risk… not too hot to bring in the Fed and not too cold to worry about the economy.

What was insightful was the breakdown of the numbers. The little guys, the medium businesses, and the mammoths, all grew at the same pace, as if everyone is reinventing themselves and/or rebuilding. What was a little worrisome is the lack of manufacturing procurement of labor. Almost all of the gain was in services and half of that in leisure and hospitality.. summer months, traveling, concerts, etc.. totally makes sense. What is needed to moderate inflation is manufacturing to come back online, to improve the output of goods, meeting demand and lowering price increases. The PMI (Manufacturing Index) numbers came out showing their continued expansion (12 months in a row) but a decline in labor.

Will it take school starting and the Pandemic Unemployment Assistance ending to bring more equilibrium to manufacturing? Will congress’ new idea for business stimulus money providing bonuses to new hires impact the labor shortage and calm wage inflation? How much will prices go up between now and then?

Unemployment has an impact on the Federal Reserves decisions, which impact rates, which impacts affordability. The labor shortages and solutions also affects our first time homebuyers, their confidence in their jobs and or the ability to return to work to qualify.

Also interesting in this month’s employment numbers was the percentage of teleworkers.. it went down from 18.3% to 16.6%. As more businesses design their back in the office strategies, your clients might be called back, want second homes where they were spending time, or revisit other employment opportunities… all of these decisions could benefit from your expertise 😉

 

Lowest Inventory in May…in Forever

Total sales in May 2021 were 5,322 up 48.7% from May 2020; as we know these year over year numbers are extreme due to the restrictions last April and May. We will start to see these year over year numbers revert next month… some of them looking like we are down due to the extreme market we felt right after the quarantine. As a note, DMAR’s average monthly sales since January 2008 is 4,275. Year to date we are UP over last year by 3,681 units or 19%. I remember having conversation last year this time, how we lost “one month’s worth of units sold”. Well, we absolutely made it up the second half of the year to have a record breaking real estate year.

This year is on pace to be another record breaking year. When interest rates start their ascent, it will put pressure on pricing, but our current limited supply and high cost of labor and materials will continue to prop up appreciation at least through 2021 and into 2022. While closings are up 19%, year to date listings are down 4.11% from last year and inventory hit another low this month with 2,075 listings at month end.

Did you miss the monthly DMAR Market Trends Update earlier this week? Click here for the first of many false summits.

 

Get MORE Buyers Under Contract and Closed in 8-10 Days!

If your buyers are not taking advantage of our new Fairway Advantage.. they should! About one third of my current pipeline now is TBD approvals. We are disclosing our clients, collecting all documents, submitting into underwriting and fully approving your buyers! This will give them a full approval pending only the appraisal. On top of that we can order a rush appraisal and close in 8-10 days…even for your FHA and VA buyers!

Are you working with buyers who need an Advantage? We are working this weekend to get started!

 

[author] [author_image timthumb=’on’]https://www.theruethteam.com/wp-content/uploads/2020/11/testimonial_image.jpg[/author_image] [author_info]Nicole Rueth has been passionately advising clients on their wealth building and home financing strategies for over 17 years. Her path has been non-conventional and it is a benefit to her clients.  www.TheRuethTeam.Com.[/author_info] [/author]