Both job creation and home construction can have a strong influence on the housing market. Changes in the aggregate level of employment and plans to build homes are used as indictors of future demand and supply, respectively.
Layoffs or the fear of potential job losses can cause home sales to decline. Conversely, strong job creation can signal steady demand for home purchases as would-be home buyers gain confidence and the equity required to buy. In addition, job losses can force homeowners into foreclosure, boosting the inventory level and placing downward pressure on home prices.
New home construction adds to the inventory level and can place downward pressure on home prices if the housing supply to too large relative to demand. In a similar way, a protracted period of low construction can leave inventory levels too low relative to demand for housing and prices will escalate as a result. Permits for construction are issued by county governments and a strong early indicator of future construction.
This report contains current indicators for construction for 156 metro areas that NAR Research monitors. These figures are generated by the Bureau of Labor Statistics and the U.S. Census and are updated monthly.