Home sales remain strong; construction employment, earnings grow in most states

Single-family home sales continued at very high levels in September 2003, two reports show.

The Data DIGest

Vol. 3, No. 43

October 21-27, 2003

Single-family home sales continued at very high levels in September, two reports today show. The government reported that sales of new homes hit a seasonally adjusted annual rate of 1,145,000, within a whisker of the revised August rate of 1,147,000 and 8% above the September 2002 pace. Year-to-date sales are 12% higher than in the first nine months of 2002, and the median selling price was $187,400, a gain of 5.6% from a year ago. (The median is the figure for which half the sales are greater and half lower.) Unsold homes totaled a slim 3.8 months of sales at current rates. Existing-home sales set a third straight monthly record, according to the National Assn. of Realtors, rising 4% from August to a seasonally adjusted annual rate of 6,690,000. That pace was 21% higher than in September 2002. The median price in that time rose 9% to $172,300. The supply of unsold homes was 4.3 times the number sold in September. All of these data, along with recent reports on low mortgage rates, and high levels of builders' expectations, building permits, and starts, suggest that single-family housing activity will remain strong for the next several months.

The Bureau of Labor Statistics (BLS) released the latest data on seasonally adjusted nonfarm employment by state on Tuesday (www.bls.gov/sae). For the economy as a whole, BLS reported that “Over the year, employment decreased in 27 states and the District of Columbia and increased in 23 states.” From August to September, 26 states had decreases; 24 states and DC had gains. As in other recent months, construction again fared better. In September 2003, seasonally adjusted construction employment rose in 26 states compared to August, fell in only 17 and remained within 100 employees of the previous level in six states and DC. Compared to September 2002, employment rose in 29 states, fell in 17 plus DC, and remained within 100 employees of the previous level in three states. (Construction data was not available for Hawaii and is combined with the small mining sector in Delaware, DC, Florida, and Maryland.) The largest year-to-year percentage gains were in Georgia (+11%), New Mexico (+7%), Louisiana, and Nevada (6% each); the largest percentage decrease was in Wisconsin (-7%), followed by Colorado, DC, and Massachusetts (all -6%).

The Bureau of Economic Analysis (BEA) on Thursday released estimates of change in personal income by state and earnings industry in the second quarter of 2003 compared to the first quarter. Earnings (payrolls, other labor income and proprietors' income) grew by 0.8% across all industries. Earnings of construction workers and proprietors rose nearly twice as fast, 1.5%. Earnings in construction rose in 34 states and DC, led by Georgia (5.2%), Delaware, New York, Florida, Utah, and Alaska (all 4% to 4.4%). Earnings in the industry fell in 16 states, led by Massachusetts, West Virginia (both -3.3%), and Kentucky (-3.2%).

BLS recently released estimates of the number and median usual weekly earnings of full-time wage and salary workers by detailed occupation and sex for 2002 (www.bls.gov/cps/cpswom2002.pdf). BLS counted 4,534,000 full-time wages and salary workers in construction trades, including 554,000 supervisors. Their median weekly earnings averaged $605. Women accounted for 94,000 workers (2%) and earned $553 per week, 91% of the male average of $606, vs. a 78% average for all occupations. The most numerous craft was carpenters (1,100,000). In addition to a dozen trades, the report also lists wages for “material moving equipment operators,” construction trades helpers, and construction laborers. Construction employees are also counted in other occupations and professions.

“The retail real-estate sector continued to perform better than its apartment and office counterparts in the thrid quarter, according to a new survey…by Reis Inc., a real-estate research firm,” the Wall Street Journal reported Wednesday. “Shopping-mall vacancies held steady at 5.7% in the third quarter, while rents jumped 1.8%....Rents were up 4.7% from a year earlier. In neighborhood and community strip malls, vacancies ticked up, to 7% in the third quarter from 6.8% in the second quarter….Rents inched up 0.7%.”