State and Metro Employment Conditions

State and Metro Employment Conditions

On February 5, 2014, in Economist Commentaries, by Lawrence Yun, Chief Economist

Want a job? Go to the frozen tundra of North Dakota. Massive oil and gas production has helped the unemployment rate to fall to 2.6 percent.   Starting wages for flipping burgers is said to run $15 to $18 an hour, while a truck driver can net near a six figure income. There is no need for complaint  about the minimum wage in a state economy that creates jobs at a rapid pace.

• North Dakota is by far the leader of the pack in terms of job creation over the past 12 months. Florida, Georgia, Oregon, and Texas round out the top five job creating states.
• Though not a state, at the other end of the spectrum, Puerto Rico is bleeding badly. A total of 25,000 fewer people are working there now compared to a year ago. Its bond has not been officially classified into junk status.
• Jobs will be ever more important for home buying as affordability conditions have been coming down. Home prices are rising much faster than income. Moreover, mortgage rates will likely rise over the course of the year.
• The table below lists the full ranking of job growth rates by states and U.S. territories.
• President Obama made the following comment in his recent State of the Union speech: “One of the biggest factors in bringing more jobs back is our commitment to American energy. The all-of-the-above energy strategy I announced a few years ago is working, and today, America is closer to energy independence than we’ve been in decades.” Irrespective of whether the President or private oil producers should get the credit, America is importing much less oil now than in any recent memory. Let’s hope that some of the big oil winners do what Rockefeller, the first U.S. oil producer, did with his oil money. He gave a sizable chunk to charities, including setting up many historically African American institutions of higher learning like Spelman College in Atlanta. As a result, many African American teachers graduated from there and passed on knowledge to poor rural schools across the South. The literacy rate among African Americans went from 20% before the giving to over 80% by the time of Rockefeller’s passing.

5 Predictions for the 2014 Real Estate Market

What real estate experts expect to see in 2014.

We are already two weeks into 2014. So, now’s a prime time to take a look at what’s in store for us this year in the world of real estate.
Signs point to another good year for the housing market, although the recovery most likely won’t clock the same breakneck speed as last year.
Here are 5 predictions, made by experts in the field, to help prepare you for any home-selling or buying activities this year:
1) Home prices will continue to rise: The chief economist for the National Association of Realtors, Lawrence Yun, foresees home prices rising by 6 percent. This is about half of the increase in home values seen in 2013, indicative of 2014’s reduced pace.
2) So will mortgage rates: I’m sorry home-buyers, but the low interest rates of 2013 are not going to stick around.  We go again to Lawrence Yun, who predicts that the average rate for a 30-year fixed mortgage will climb to 5.5 percent before the year is over.
3) Fewer foreclosures on the horizon: Thankfully, the worst of the foreclosure catastrophe that devastated so many Americans appears to be history.  According to Daren Blomquist, who monitors the foreclosure market at RealtyTrac,  "We're in the home stretch of getting through the foreclosure crisis, but we won't cross the finish line, with filings back to pre-crisis level, until early 2015."
4) Borrowers can expect more ease in securing a mortgage: Although interest rates are expected to rise, Erin Lantz, director of mortgages with Zillow, points to a “silver lining.” Lantz says that “rising rates means lenders' refinance business will dwindle, forcing them to compete for buyers by potentially loosening their lending standards."   That’s encouraging.
5) Rental market to stay strong: Because of items 1 and 2 above, along with other factors such as a decline in home-ownership and a surge in Americans on the move, forecasters at Zillow envision a robust rental market in 2014.