Yeah, but what about jobs?
It’s worth mentioning, however, that low interest rates and dropping prices are great but falling unemployment rates would be even better. The truth of the matter is that people tend to not buy major things like houses if they’re not working. People without jobs tend to fall behind on their mortgages, too.
A lot of the economic news we’re inundated with tends to overlook one very important truth – perhaps the largest economic indicator is the unemployment rate. When we see that fall to tolerable levels, we’ll know that the economy is on the mend and everything from the housing market to the automotive industry will likely post greatly improved numbers.
Yes, it really is as simple as that.
Nationally, the unemployment news in August was somewhat encouraging. The national unemployment rate was 9.1 percent in August – down from 9.6 percent in the same month last year. The unemployment rate from July to August was flat at 9.1 percent.
In Arkansas, the news was a bit more mixed. The unemployment rate in August was lower than the national rate at 8.3 percent, but up from 7.8 percent a year ago and up from 8.2 percent in July. In real numbers, 112,000 Arkansans were unemployed in August and that’s up from 105,000 in the same month last year.
Fortunately, there were 1.24 million Arkansans working in August. It seems that enough of them were secure in their jobs and future prospects to push homes sales up almost 20 percent in August. Yes, those were people who were able to pick up a great deal or two by taking advantage of dropping home prices and interest rates that are hovering around record lows.
Should the improved sales come as a surprise? Not really as some pretty basic market dynamics were in place – sales do increase when the price of an item for sale drops. It is significant to point out that the market is floating along – and hopefully improving – without any atypical government stimulus programs encouraging people to purchase houses.
That’s good news for the housing industry. In spite of unemployment rates that are in need of improvement, market conditions were such that the number of homes sold improved in August. Hopefully, we’ll see sales continue to improve and stabilize for long enough that home values will start to increase, too. This market is great if one happens to be a buyer, and the pendulum will swing back to when the advantage rests with the seller in the future.
Still, how much more and how much quicker would the housing industry and other sectors of the economy improve if unemployment numbers fell? When people talk about the economy, finding ways to put more Americans to work should always be part of the conversation.
Benton resident. Rogue journalist. Recovering attorney. Email = Ethan@FirstArkansasNews.net.