Solid hiring helped lower unemployment rates in 40 U.S. states last month, the most since November. The declines show the job market is improving throughout most of the country. The Labor Department said that unemployment rates increased in only three states: Louisiana, Tennessee and North Dakota. Rates were unchanged in seven states. California, New York and South Carolina all reported the largest unemployment rate declines in April. Each state’s rate fell by 0.4 percentage points. The report said 30 states added jobs in April, while 18 reported fewer jobs. Nationwide, employers added 165,000 jobs in April and the unemployment rate fell to a four-year low of 7.5 percent. The economy has added an average of 208,000 jobs a month since November. The housing recovery is creating jobs in many states. Texas has created 41,500 construction jobs in the past year. That’s helped the state be the nation’s leader in job growth over the past year and in April. The state added 33,100 jobs last month and 326,100 jobs over the past 12 months. [Read this article]

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The “juice” that will fuel the economic recovery is housing, or more specifically, new home sales, Freddie Mac stated in its economic and housing market outlook report for May. Although the unemployment rate has been decreasing, falling to 6.5 percent in April, the GSE explained the reduction is due to a decline in the labor force participation rate, not an increase in employment. According to Freddie Mac, the labor force participation rate, which remained at 63 percent in April, was at the lowest level since 1980. However, as the building of new homes adds to the availability of jobs, the unemployment rate should inch down. “Based on historical correlations, every additional 100 thousand housing units started brings down the unemployment rate for construction workers by about three-fourths of a percentage point,” the report stated. For 2013, Freddie Mac forecasts housing starts will increase by 200,000 units, which would support over 100,000 new jobs in construction. Adding to this are the additional households that will form. [Read this article]

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Many housing observers agree that Generation Y – people from 18 to 34 years of age – largely prefers downtown living, often in rental apartments with easy access to walkable neighborhoods and public transportation. The real question is whether they’ll outgrow those tastes once they earn higher salaries and have kids. The Urban Land Institute, or ULI, the land-use association that long has championed dense development over sprawl, this week plans to release the results of a survey of generational housing preferences, highlighting those of Generation Y. ULI heralds Generation Y, with nearly 80 million members, as a potential “game changer” in the U.S. real estate market (they are also known as “Millennials”). Of survey respondents in that age range, 59% said they prefer their neighborhood to have a variety of housing types; 62% favor mixed-use developments with shops, restaurants and offices; and 52% like pedestrian-friendly neighborhoods. [Read this article]

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Ever since the recovery began in 2009, a weak housing market has held back the U.S. economy. The first rebound in home prices was lackluster and after only a year was followed by another dip. But the recent upturn in home prices looks like the real thing. One clear sign of a turning point: In March, homeownership hit a 17-year low, while the 12-month gain in home prices was the biggest in seven years. Those two extremes suggest that the market has hit bottom. The people who are least well financed have been squeezed out, while demand is growing among people who can afford to pay higher home prices. If that trend continues – and there are good reasons to believe it will – a substantial burden will be lifted from the U.S. economy. In the first quarter, home prices were higher (compared with a year earlier) in 133 of 150 metropolitan areas, according to the National Association of Realtors. On a national basis, the median home price gained 11.3%, the biggest yearly gain since 2005. [Read this article]

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Confidence among U.S. homebuilders improved in May for the first time in five months as buyers rush to take advantage of near record-low mortgage rates. The National Association of Home Builders/Wells Fargo index of builder confidence rose to 44 from a revised 41 in April. “Builders are noting an increased sense of urgency among potential buyers as a result of thinning inventories of homes for sale, continuing affordable mortgage rates and strengthening local economies,” said Rick Judson, chairman of the trade group. “This is definitely an encouraging sign.” Low mortgage rates, a strengthening job market and limited inventories are benefiting builders as the housing market contributes to growth this year after emerging as a bright spot in 2012. All three components of the homebuilder survey showed improvement: sales outlook for the next six months, prospective buyer traffic and current single-family home sales. [Read this article]

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It’s shaping up to be a hot summer for the U.S. housing market. An index that measures prices received by real-estate agents and brokers posted its largest year-over-year jump in April in nearly eight years. Home price indexes such as the S&P/Case-Shiller series report prices with a two-month delay. The producer price index, on the other hand, provides an early snapshot at how the spring housing season is shaping up. The index showed a 9.1% gain in prices from a year ago. While it isn’t seasonally adjusted, economists at Credit Suisse note that the March-to-April jump of 2.7% was the largest March-to-April gain in the 17-year history of the series. The monthly gain “blew away all other past Aprils,” wrote Jonathan Basile, an economist at Credit Suisse. Home prices have been on a tear over the past year as buyers return to a market where the number of properties is in short supply. [Read this article]

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Consider this one more sign that the housing market is heating up: Appraisers are putting higher values on homes again, allowing for more deals to go through. During the housing bust, sales were often derailed by low-ball appraisals that fell far shy of a home’s selling price. For example, if a home cost $500,000 and required a 20% down payment of $100,000, the buyer would need to finance $400,000. But if the appraiser valued the home at $450,000, the buyer would only be eligible for a $360,000 loan – making the home too costly for some buyers. But now, as home prices climb and housing inventories shrink, appraisers are valuing homes at or above their selling prices, according to Lawrence Yun, chief economist for the National Association of Realtors. And in some of the hottest markets, appraisals are coming in well above the selling price. [Read this article]

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The available supply of foreclosures and short sales previously stunted the recovery for new home sales, according to CoreLogic’s May MarketPulse report. Though, now that the supply of distressed homes and existing-homes for sale has fallen, there’s more room for the new home sales market to expand. According to CoreLogic, the number of seriously delinquent mortgages peaked at 3.7 million in January 2010, but has fallen by 1.2 million, or by 33 percent. As delinquencies decline, new home sales are rebounding after hitting low points over recent years. Citing data from the Census Bureau, CoreLogic reported new home sales have increased 19 percent from a year ago in March. Improvements in the new home sales market also benefits the economy in several ways since new homes require the acquisition and development of new land, the purchase of supplies, and the need for labor. According to the report, every new home requires five full-time jobs for 12 months. [Read this article]

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The sharp upturn in the housing market over the past year has more economists and housing pundits worried about a housing bubble. But a new report from the real-estate website Trulia has a different message: chill out, there’s no bubble right now. Yes, home prices in many parts of the country are rising today at the same rate that they did during the bubble years of 2003, 2004, and 2005. But the Trulia analysis found that, when compared with traditional price drivers such as rents and incomes, home prices are undervalued on a national basis by around 7%, compared to being 39% overvalued in early 2006. “Today’s price gains are actually still a rebound, not a bubble,” writes Jed Kolko, chief economist at Trulia. Prices are the most undervalued in Las Vegas (-24%) and Detroit (-23%), which have nevertheless witnessed big price rebounds over the past year. [Read this article]

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When David Pendery decided to move his family from Colorado to Illinois this year for work, his biggest worry was whether he would be able to sell his home quickly. It took just three days. Pendery’s experience may be on the extreme side, but his case may be a sign of a revival in one of the historical advantages of the U.S. job market: the ability of workers to go where the jobs are. For much of the past five years, falling house prices effectively locked people in their homes, since many were “underwater” – owing more on their mortgages than they could raise by selling. At the same time, double-digit unemployment across much of the nation meant there were few jobs to move for anyway. That may be changing. While far from their 2006 peak, home prices in major metropolitan areas have been rising since early 2012. If that persists, it should make it easier for Americans to move and for employers to match job seekers with available jobs, lowering the jobless rate and increasing overall economic productivity and growth. [Read this article]

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