Zonda Newsfeed: Strong Labor Market Fuels Housing Demand


The housing market appears to be poised for another strong year based on overall fundamentals. Single-family housing starts hit a 10-year high, providing much needed supply. This is welcome news as the recent dearth of housing supply for both the new and existing homes have driven up prices significantly. In fact, existing home prices are up nearly 40% nationally over the past 5 years, far outpacing the US average of 10% wage growth over the same period. Luckily, the Treasury market is keeping mortgage rates in check, which helps combat some of the affordability challenges.

– Ali Wolf, Director of Economic Research 

Strength In Labor Market

Longest stretch in nonfarm payrolls. Jobs increased by 148,000 in December, marking the 87th month of increases but falling below expectations. In 2017, monthly job growth averaged 171K, signifying a strong year for the US labor market. In addition, the tight labor market pushed long-term unemployment back to pre-recession levels. This is great for people who can quickly get a new job after being displaced, but can be frustrating for companies who are faced with few options to fill their open positions. In theory, the lack of qualified candidates should help drive up wages as businesses compete for limited resources.

Nonfarm Job Growth Chart

Single-Family Housing Starts Reach 10-Year High

Much-needed housing supply on the way. US housing starts increased 13% YOY to 1.3M units. Breaking this out by sector, single-family starts also increased 13% compared to last year and has reached the highest level since September 2007. Multifamily starts grew by 11% YOY. Although total housing starts are still below the 41-year average of 1.4 million units, they have remained above the 1 million annual pace for 32 consecutive months.

Housing Demand Remains Strong

Weekly mortgage data shows upward trend in home sales. Purchase mortgage applications are supplemental to the monthly new home sales data and give a timely update on mortgage activity. For the last week of December, mortgage applications were 2.4% higher than the same period last year. The refinance share of mortgage activity increased to 52% as continued sub-4.0% mortgage rates keep a steady flow of refinances in the market.


You can find all of the charts in this newsfeed in the Zonda app. Zonda updates housing data instantly in real time, so you don’t have to wait monthly or weekly for the latest insights. Plus, you’ll have access to over 50 Market Reports full of rich infographics and news highlights spanning coast-to-coast. Curious?