Unemployment Claims Fall While Housing Starts Pick Up

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Unemployment Claims Fall While Housing Starts Pick Up

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The real estate market as we know it is impacted by a lot of different factors and influences. The economy, of course, is the main one, with unemployment being a pretty big part of the problem. As people continue to file for unemployment claims, they continue to have difficulty making their mortgage payments every month. When they miss payments and become delinquent, without any means of paying the mortgage, foreclosure is the inevitable result.

That is why we follow the unemployment rate and see how many initial and continuing claims are being filed on a monthly basis. As unemployment goes, so goes the housing market and economy as a whole. Fortunately, last week the number of unemployment claims dropped, falling by 16,000 to 414,000.

This number is still above the threshold of 400,000 and has been for almost three months now. But, a decrease is still good to see – even if we are still in a worse shape in the job market than we were a year ago.

In addition to this bit of news, we also saw an increase in housing starts. New home construction increased in April by 3.5%, with approximately 560,000 units being added per year once you adjust for 12 months. This is still too far below the magic number of 1.2 million units per year that we need in order to have a healthy housing market, and homebuilders still have steep competition to face with the massive amount of foreclosures on the market.

Still, it’s good to see that housing starts are picking up, albeit slowly. The more houses that are built, the better the economy will be, simply speaking. Of course, the foreclosure inventory is far from shrinking; in fact, it is still growing each month as new foreclosures are added to it.

Regardless, both numbers- unemployment claims and housing starts – indicate that the economy still has a ways to go. But, buying has never been more advantageous than it is now.