Although the U.S. home construction industry continues to lag behind the broader job market, improvements in housing are expected to create jobs and boost construction this year, mortgage financier Freddie Mac said in a new report, Housing: Getting Back To Work.
All major housing indicators have recently reported gains: Housing starts have increased by 26 percent to an average annual rate of 719,000 in the first five months of 2012, compared to the prior year. New home sales have increased 17 percent and existing home sales have risen 7 percent in the first five months on an annual basis.
But the construction job market has lagged behind, with residential construction actually losing 6,000 jobs in June. Between 2006 and 2010, the sector has lost 1.5 million jobs, according to the U.S. Bureau of Labor Statistics, and the related field of real estate credit and loan brokerage was flat. The mild winter may have also dampened job numbers in the second quarter, shifting some growth to the beginning of the year.
While the housing market remains fragile, Freddie Mac said Wednesday that the rebound is underway.
While housing may not have played its traditional role coming out of the Great Recession, at the end of the day, it has turned a very large corner and now it's time to get this sector back to work whether through construction jobs, remodeling, or home brokerage, Frank Nothaft, Freddie Mac's chief economist, said in a statement.
U.S. homebuilder confidence rose to a five-year high in June, according to the National Association of Home Builders and Wells Fargo. The average 30-year fixed-rate mortgage fell to another record low of 3.53 percent in the week ending July 19, and the low rates are expected to remain, potentially boosting home transactions and creating more demand.
Homebuilder stocks have also benefitted. Lennar Corp. (NYSE: LEN) is up 54.1 percent this year to around $30.31, KB Home (NYSE: KBH) has risen 43.14 percent to around $9.62 andD.R> Horton Inc. (NYSE: DHI) is up 46.3 percent to $18.45 this year.