June jobs report reveals impact of layoffs on real estate sector
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Fears of an impending recession and a series of major layoff announcements put only a moderate drag on real estate hiring last month.
Real estate employers in the financial sector – a category that includes brokerages – added 3,700 jobs in June on a seasonally adjusted basis, according to the latest employment report from the US Bureau of Labor Statistics.
That’s a slowdown from previous months — employers added 6,100 real estate jobs in April and 7,400 in May — but still a healthy number that keeps pace with the economy as a whole over the past month. a surprisingly strong month of employment growth.
U.S. employers added 372,000 jobs to nonfarm payrolls last month, even as the Federal Reserve tightened its monetary policy in an effort to fight high price inflation.
“The economy in the first half of the year averaged 450,000 job creations per month, which is an extremely robust pace by historical standards,” said Joel Kan, associate vice president of economic forecasting. and industries, in a press release. “This labor market strength comes despite other economic data showing signs of weakening and a higher likelihood of a recession.”
The news may have particularly surprised real estate professionals, who were inundated with high-profile layoff announcements These last months.
In mid-June, Seattle-based real estate firm Redfin announced it was laying off 8% of its workforce in response to a drop in demand from homebuyers.
“We could be facing years, not months, of fewer home sales, and Redfin still expects to thrive,” CEO Glenn Kelman said. said at the time.
New York-based brokerage firm Compass has announced 10% discount into full-time staff at about the same time. Other companies have announced a series of layoffs in the weeks before and since, with the mortgage industry hit particularly hard.
But what the federal data shows is that while these real estate companies have been scrambling to cut costs, others have continued to hire undeterred.
This was not the case in all corners of the real estate industry, however.
The drop in sales in the new home construction sector seems to have finally weighed on the payroll of homebuilders.
While construction employment was on the rise overall, residential construction hiring virtually came to a standstill in June.
Between home builders and residential trade contractors, employers cut more than 4,000 jobs from May to June on a seasonally adjusted basis.
This is a relatively small decline in this large industry – about 0.1% of total employment in residential construction – but also a notable departure from the solid hiring figures previous months.
“The housing market continues to suffer from a low supply of homes for sale as material and labor costs remain high,” Kan said in the statement. “The strength of the labor market is still positive for the housing market, but aggregate demand has cooled due to the recent spike in mortgage rates, high house prices and growing economic uncertainty.”
Email Daniel Houston