These are the areas with the biggest home price declines during the housing crash and which now have the highest vacancy rates. “Job growth in clobbered metros was just 0.7% through April, not even half of the national average of 1.5% for the same period,” Kolko adds, citing data from a report earlier this week.
The weaker-than expected jobs report for May doesn’t bode well for the overall economy, but for housing it is far more foreboding. From construction, to local economies, even to age segments, the numbers are going in the wrong direction. The construction sector lost 28,000 jobs, down 3.3% from three months ago.
This undoubtedly points to lower housing starts over the summer, despite gains this spring.
We are already seeing a drop in building permits, which were down seven percent in April, even as housing starts rose just over two percent. “The recent trend is reminiscent of the monthly patterns of the spring slowdown witnessed over the last two years that continued through the summer months. If this pattern recurs, we expect that hopes for a meaningful housing recovery will be delayed once again,” says Fannie Mae‘s chief economist Doug Duncan, who also notes that the “hopeful signs of improving consumer sentiment in housing” is not supported by today’s data.
Translation: The housing market still sucks and there is no light at the end of the tunnel.