There has been a lot of talk about a potential recession in recent times, but the economy has been far more resilient than some experts initially anticipated. One of the main reasons for this is the robust employment figures and steady wages. These factors are good news for anyone thinking of selling their house, and we’ll explore why in more detail in this article.
The first significant trend we observe is that more jobs are being created. Instead of experiencing job losses typical in a recession, the economy continues to grow, and new jobs are emerging. According to the Bureau of Labor Statistics (BLS), over 187,000 jobs were created in July, an increase from June’s 185,000. This means more people have employment and, in turn, more income to invest in a new home purchase.
Furthermore, increasing wages allow people to have more disposable income, which can be used to save or buy a new home. The rise in income helps offset some of the affordability challenges people face in the current housing market. Affordability relates to three main factors: wages, home prices, and mortgage rates. With higher home prices and mortgage rates, the increase in wages can make a substantial difference.
As noted in Builder Online, increasing wages could provide a considerable boost: “A family earning $61,000 in June 2019 could afford to purchase a $314,000 home at prevailing mortgage rates and home prices, according to the National Association of Realtors Housing Affordability Index.” This extra purchasing power can help a home seller get more out of their home sale if the price rises due to the demand.
Another indicator of a resilient economy is the low unemployment rate, which is lower than the historical average of 5.7%. In general, a low unemployment figure is a good thing, as it is easier to find and retain talent. The current job market has led to many people having stable employment and purchasing new homes, with no fear of immediate layoffs. This stable, optimistic environment can lead to more confident spending on “big-ticket items” and particularly to a new home purchase.
In summary, while talk of a recession may be worrying, many current economic indicators are positive. The steady employment market and rising wages provide people with a more substantial income, increasing their purchasing power and making it easier to afford a new home, despite the higher prices. The resilient economy has also led to a low unemployment rate and increased consumer confidence, positively impacting the real estate market. Therefore, if you’re thinking about selling your home, examine your options during the current era of a thriving economy and stable employment environment.