MReport June 2017

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46 | TH E M R EP O RT O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST DATA U.S. Jobs Up, But Construction Employment Flounders Industry experts call the growth a "disappointment." T he April employment report from the Bureau of Labor Statistics showed strong overall growth, with a total increase in non-farm payroll jobs of 211,000, compared to March's increase of 79,000. Department of Labor Sec - retary Alexander Acosta tweeted that the report was "great news," and noted the unemployment drop to 4.4 percent. Despite the overall optimism, the housing and construction em - ployment numbers didn't see quite this level of growth, and the 5,000 new jobs created in this sector were called a "disappointment" by First American Chief Economist Mark Fleming. Fleming noted that this growth is a 2.6 percent increase from a year ago. "Home builders are report - ing that the lack of construction workers is hampering their ability to increase production, which is a desperately needed source of sup - ply, as most markets already have very tight inventories of homes for sale," Fleming said. "In fact, we have been underbuilding residen- tial housing relative to demand since 2009." Senior Economist Joseph Kirchner voiced a similar concern, stating his disappoint - ment in April's numbers. The 5,000 construction jobs that were added are just "a fraction of what we need," Kirchner said, "and it won't solve the inventory prob - lems that stop consumers from finding homes to buy." Not all is lost though. The over- all employment rate is still high, and unemployment is dropping. Fannie Mae Chief Economist Doug Duncan noted that the U6 rate, the broadest measure of labor un - derutilization, fell to its lowest rate since November 2007. To Duncan, these are positives that send a clear message. "The labor market is tight, with continued declines in discouraged workers and part-timers who pre - fer full-time jobs," Duncan said. "The report is consistent with a faster pace of monetary policy normalization this year and sup - ports our expectation of two rate hikes in June and September and a change in the Fed's reinvestment policy in December." Confidence in Housing Market Plateaus A survey shows that homebuyers are a little less confident in the market, as interest rates continue to rise. A mericans remained as confident in the U.S. housing market as they have been, but this cautious optimism may be on shaky ground. That, at least, is the conclusion of ValueInsured's quarterly Modern Homebuyer Survey, released in April. The survey index ended Q1 at 67.7 out of 100, which was down less than 1 percentage point from Q 4. According to the index, the so-called Trump bump "has plateaued after two interest rate increases in three months." While Americans were gener - ally confident in the market, only about half—48 percent—said they believe the housing market will be more favorable with the Trump administration. That's down from 52 percent who said so in January. At the same time, while 63 percent of Americans said they are hopeful that 2017 will be a better year for housing than 2016, 69 percent said so in January. Most guarded feelings stemmed from prospective first-time and upgrade homebuyers, who said they sense growing risk regarding rising home prices and interest rates. Tellingly, three-fifths of interested homebuyers said six months ago was a better time to buy a home and that six months from now will be worse. Sixty- five percent said they expect more interest rate increases this year, and 61 percent say "the era of affordable mortgages is coming to an end," the report showed. Similar doubts nag millennial first-time homebuyers, 54 percent of whom said they're not confident if they were to buy a home this year that it would be worth more next year. That compares to 48 percent of all others who said the same and is an increase of 13 per - cent points in just three months. Similarly, two-thirds of millennial first-time buyers said last year would have been a bet- ter year to buy, and that number slipped 6 percent toward doubt. "It's natural for buyers to be anxious," ValueInsured CEO Joe Melendez said. "As prices rise, buyers are seeking ways to protect themselves." Still, the basic tenets of home - ownership were largely valuable to survey respondents. According to ValueInsured, nearly 80 per- cent of those surveyed said they believe buying a home is more financially beneficial than renting, that they would like to buy a home, and that owning home is an important part of their American Dream. Those percent - ages were largely consistent with January's survey.

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