National Economic Outlook - November 2015

Written By:
Ingo Winzer, President

Local Market Monitor

At the height of the building boom before the recession of 2008, 3.5 million Americans were employed building homes - and that's not counting maybe a million illegal workers. During the recession the total dropped to 2 million and now it's 2.5 million workers. At the current rate of growth - about 4 percent - 100,000 home-building jobs will be added in the next year. During the boom, the maximum annual addition was 150,000 jobs.

At a minimum, the US needs 1.5 million new homes a year - but the current level of production is just 1 million. Because home builders can't add jobs overnight, the US will very soon be facing a shortage of housing that will last years. Since 2008, the real estate market has been dominated by falling home prices and speculation in foreclosed properties. That period is over. The next five years will see both home prices and rents rise faster than incomes.

The economy added 2.7 million jobs in the past year, a 1.9 percent growth rate. In October, jobs were up a modest 0.5 percent in manufacturing, 2 percent in retail trade, 3.3 percent in business services, 3.3 percent in healthcare, and 3.4 percent at restaurants. Government jobs were virtually flat. Unemployment remained at 5 percent.