Unemployment and housing are joined at the wrist. Rising unemployment hurts housing demand and that drives down the demand for residential construction jobs. That's pretty much what we've seen in the recession.
Throw the housing / mortgage crisis into the mix and it's easy to see why the home construction business is in tough straits.
So while we hope Minnesota's new jobless data -- set for release on Thursday -- show better times for construction, numbers released today by the Minnesota Housing Partnership don't give us a lot of optimism.
The group's second quarter report holds lots of great detail. But this jumped out at us:
Quarterly employment in residential housing construction fell to an average of just under 9,100 jobs per month, the lowest level in 15 years for the second quarter.
The supply of homes for sale rose to 7.2 months by the end of the quarter, which may continue to place downward pressure on prices.
On average, 29% of the supply of homes for sale this quarter included foreclosures or short sales. Three years ago only 9% of the inventory consisted of such homes.
Here's the employment trend line:
In Minnesota's July unemployment report, construction had the dubious honor of having the greatest year-over-year job loss (-6,500) and the highest percentage job loss (-6.2 percent) of any state sector.
My colleague Chris Farrell pointed out this morning how closely housing construction is tied to unemployment.
"The housing market is not a good place to be right now," he said this morning. He was talking about sales and prices.
For now, at least, it also describes the state of the folks who do the building.
If you're in housing construction or have a different take on what's happening currently, we'd love to hear it. Post something below or contact us directly at MinnEcon.