If you are in the market to buy or sell a home or are a real estate professional you should be aware of the employment report due this Friday March 7th. It is the day real estate and mortgage markets hold their collective breath for the all important Employment numbers. It is often mistakenly called the “unemployment report” because it provides the monthly snapshot of the percentage of those that are unemployed. The report itself is horribly complex and is not typically made up from real numbers in a computer but rather comprised from several surveys. The number inside this report is not the number of construction jobs created as suspected by most but rather the employment number for young adults, the percentage of 25 to 34 year olds that are employed.
That’s right the number inside the number is the number of “young adults” that are in the workforce. Before the “financial meltdown” that number was consistently in the 78 to 80% range according to the economist at Trulia. At the depths of the recession that number moved down pretty substantially to 73.5% and stayed at that level through most of 2011. 2012 did see a jump to 75%. While small moves in either direction may seem silly each percentage point move equates to approximately 400,000 people.
Hence the importance of the number inside the number as these potential buyers/renters affects real estate. The higher percentage of “young adults” that are employed the greater chance they will move out of your basement and start their own lives. The first time home buyer needs to move out and rent for a while before they buy a home. It is a process and it starts here.
So Friday morning at 8:30am (est) listen for the headline number but dig a little deeper and look for the number (inside the number) of young adults in the workforce.