Slower job growth expected to curb immigration, housing demand

Slowing labor force and population growth over the next decade could be a drag on housing demand and new-home production, economists at Fannie Mae say, citing Labor Department and Census Bureau projections.

The U.S. Bureau of Labor Statistics expects annual labor force growth to average 0.6 percent from 2012 through 2025, compared with 1.5 percent from 1948 through 2012. The slowdown in job growth will curb immigration, the Census Bureau said in reducing its projections for annual population growth from 2012 to 2025 to 0.8 percent, down from 0.9 percent in a 2008 estimate.

New housing production is more closely correlated with growth in the labor force and household formation than with the population growth rate, Fannie Mae economists noted. Source: fanniemae.com.