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November 11, 2019
Doctors: Construction Job Openings Continue Year-over-Year Gains
Data from the BLS Job Openings and Labor Turnover Survey (JOLTS) indicate that construction job openings increased in September on a year-over-year basis. The estimated number of job openings declined from the August total to 338,000 in September, after reaching a post-Great Recession high of 434,000 in April. The September 2019 count of unfilled jobs represents a year-over-year gain relative to the 299,000 estimated unfilled construction jobs in September 2018.
The open position rate (job openings as a percentage of total employment plus current job openings) dipped to 4.3% in September, after reaching a cycle high of 5.5% in April. On a smoothed, twelve-month moving average basis, the open position rate for the construction sector held steady at 4.3%. The peak (smoothed) rate during the building boom prior to the recession was just below 2.7%. For the current cycle, the sector has been above that rate since October 2016.
The overall trend for open construction jobs has been increasing since the end of the Great Recession. This matches NAHB and other survey data revealing that access to skilled labor remains a top business challenge for builders, affecting a broad set of occupations. However, more modest growth rates for housing construction for 2019 and 2020 are likely to place downward pressure on construction job openings in future data releases. That is, 2019 may mark the year for which the job openings rate for construction levels off, albeit at elevated levels. This would nonetheless be a continuing sign for the need for additional worker recruitment into the industry.
The construction sector hiring rate, as measured on a twelve-month moving average basis, held steady at 5.3% in September. The twelve-month moving average for layoffs ticked up to 2.6%, continuing a rising trend in recent months, likely connected to some market churn associated with housing affordability headwinds.
Source: NAHB | Robert Dietz
Looking Ahead: Upcoming Key Market Dates
Weekly mortgage applications flatline for the second straight week
Mortgage rates fell last week, but mortgage demand was unimpressed.
Total mortgage application volume was essentially unchanged, down 0.1% compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. Volume was 60% higher than the same week one year ago, when interest rates were significantly higher.
“U.S. Treasury yields once again exhibited some intraweek volatility before declining sharply toward the end of the week,” said Joel Kan, associate vice president of economic and industry forecasting.
Mortgage applications to refinance a home loan, which are most sensitive to weekly moves in rates, increased 2% for the week and were 144% higher than a year ago. Refinance volume is significantly higher this year because rates are so much lower.
Homebuyers pulled back slightly, more because of a tight for-sale market and having less to do with interest rates. Mortgage applications to purchase a home fell 3% for the week but were 7% higher than a year ago.
“Amidst persistent supply constraints in the entry-level price range, there’s evidence that high-end homebuyers are more active this fall,” said Kan. “The average loan size for purchase applications increased to its highest level since May.”
Home prices are also starting to heat up again, due to that lack of supply. Affordability is weakening, and fastest at the low end of the market, where demand is strongest.
Mortgage rates moved sharply higher to start this week, as more positive news of a trade deal with China emerged. Rates are now at the highest level they’ve been in about three months.