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Fears of impending recession and a spate of prominent layoff announcements put only a moderate damper 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 jobs report from the U.S. 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 tracks with the economy’s pace as a whole during a surprisingly strong month of job growth.
Employers across the U.S. added 372,000 jobs to non-farm 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 gains per month, which is an extremely robust pace by historical standards,” Joel Kan, associate vice president of economic and industry forecasting, said in a statement. “This labor market strength comes despite other economic data showing signs of weakening and a higher probability of a recession.”
The news may have come as a particular surprise to real estate professionals, who were inundated with high-profile layoff announcements in recent months.
In mid-June, Seattle-based real estate company Redfin said it was laying off 8 percent of its workforce in response to a decline in homebuyer demand.
“We could be facing years, not months, of fewer home sales, and Redfin still plans to thrive,” CEO Glenn Kelman said at the time.
New York-based brokerage Compass announced a 10 percent reduction in full-time staff around the same time. Other companies 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 even as these real estate companies scrambled to cut costs, others moved forward with hiring undeterred.
That wasn’t the case in every corner of the real estate industry, however.
Declining sales in new home construction appeared to finally take a toll on homebuilder payrolls.
While construction jobs were up overall, hiring in residential building came to a virtual halt in June.
Between homebuilders and residential trade contractors, employers shed more than 4,000 jobs from May to June on a seasonally adjusted basis.
That’s a relatively small dip in this large industry — about 0.1 percent of total employment in residential construction — but also a notable departure from the strong hiring numbers of previous months.
“The housing market continues to suffer from a low supply of homes for sale, as material and labor costs remain elevated,” Kan said in the statement. “The strong labor market is still a positive for the housing market, but overall demand has cooled from the recent jump in mortgage rates, high home prices, and rising economic uncertainty.”
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Hunters Race / Unsplash