This report is available exclusively to subscribers of Inman Intel, a data and research arm of Inman offering deep insights and market intelligence on the business of residential real estate and proptech. Subscribe today.
Layoffs by high-profile brokerages and tech firms in January failed to drag down hiring in the real estate industry as a whole, new government numbers suggest.
Employers in real estate — a category that includes offices of brokers, agents and property managers — held steady with their payrolls in January, a month when some staff attrition is usually the norm. This change amounts to an 8,800 monthly increase in real estate jobs on a seasonally adjusted basis, according to a report released Friday by the U.S. Bureau of Labor Statistics.
The robust real estate jobs market is part of a broader hiring environment that has exceeded expectations amid the Federal Reserve’s efforts to hike rates and arrest consumer price inflation, Mortgage Bankers Association Chief Economist Mike Fratantoni said in a statement.
“Recent data on unemployment insurance claims have indicated a stronger job market than the string of layoff announcements from the technology and financial sectors would suggest,” Fratantoni said in the statement. “Job growth of 517,000 in January, and a drop in the unemployment rate to 3.4%, puts an exclamation point on the divergence between measures of economic activity and job market statistics.”
As hot as the U.S. hiring numbers were overall this month, the staffing trend in broker and agent offices was even hotter.
Real estate payrolls grew 0.5 percent from December to January on a seasonally adjusted basis and were 3.8 percent higher than the first month of last year.
That’s significantly faster than the 0.3 percent jobs growth recorded last month in non-farm payrolls across all U.S. industries, which capped off a 3.3 percent rise year-over-year.
But while agents and brokers offices defied seasonal hiring trends, residential construction jobs remained in a relative holding pattern.
As more buyers backed out of contracts for new homes and builders expressed anxiety over the sales environment in the near future, payroll levels remained largely unchanged.
The number of workers employed by residential builders and trade contractors slid slightly to just under 3.2 million.
A decline this small is actually smaller than what’s typically expected for January, amounting to a slight increase in residential construction jobs on a seasonally adjusted basis.
Still, at a monthly increase of 0.2 percent, residential construction hiring trailed the national hiring trend as a whole.
Such strong job numbers and low unemployment rates may draw even more attention to the Fed’s response. The nation’s central bank has been raising interest rates in an effort to slow long-term wage growth and control price inflation in housing and other categories.
“With the job market this tight, the Federal Reserve and financial markets will remain even more focused on the inflation data,” Fratantoni said in the statement. “We expect another 25-basis-point increase in the federal funds target in March, but do anticipate that the unemployment rate, which does tend to be a lagging indicator, will increase through the course of the year.”