Monday, June 26, 2006

"Mortgage brokers, prepare your résumés"

From the Wall Street Journal:

A Housing Slowdown Can Put the Brakes on a Job Sector But Open Other Opportunities
By MARK WHITEHOUSE

Mortgage brokers, prepare your résumés. And while you are at it, highlight any experience you've had in health care.

The reason: Housing, the biggest generator of jobs in the current expansion, is running out of steam. As a result, tens of thousands of Americans, from bankers to hardware-store clerks, are likely to find themselves out of work over the next couple of years. For those who can transfer their skills to other industries that are still growing, such as health care, it won't be the end of the world.

"It's not going to be a big show-stopper, because there are other areas of the economy that are picking up," says Brian Bethune, U.S. economist at consulting firm Global Insight.

Few sectors can claim to have as much sway over the economy as housing. Housing-related employment has accounted for about 23% of the 4.9 million jobs created since the nation's job market began to grow in late 2003, according to Moody's Economy.com. That includes architects, contractors, real-estate agents, brokers and bankers, as well as the host of others who provide the industry with materials and services.

"There's never been a housing boom like this one in terms of the reach, in terms of the range of industries affected," says Ethan Harris, chief U.S. economist at Lehman Brothers in New York. "This is clearly unprecedented."

Now, the boom is coming to an end. Total single-family-home sales were running at an annualized rate of 7.1 million in April, down more than 6% from the June 2005 peak. Backlogs of unsold homes are rising, and price increases are slowing.

Economists expect the slowdown to affect more than just housing-related jobs: As stagnating house prices and higher interest rates limit Americans' ability to use their homes as a source of cash, they are likely to spend less money on consumer goods, meaning less work for all kinds of folks, from assembly-line workers to shop assistants.

9 Comments:

Blogger grim said...

Thanks to CF for this piece.

jb

6/26/2006 06:28:00 AM  
Blogger patient homebuyer said...

i work for a living so i guess all these mortgage brokers (the new ones)and these real? estate agents will have to find other employment, oh well tough break

6/26/2006 08:42:00 AM  
Anonymous Anonymous said...

I dont know..my buddy is a mortgage broker and he just bought a 800k home.

6/26/2006 09:11:00 AM  
Anonymous Anonymous said...

Lots of realtors builders mtg brokers plumbers electricians and landscapers going to feel the slowdown. Lots of these people livng it up over the last few years. Hopefully they saved some for a rainy day.

6/26/2006 09:24:00 AM  
Anonymous Anonymous said...

"More than half of the nation's $9.2 trillion in outstanding residential mortgage and home equity loans are less than 3 years old, said Doug Duncan, chief economist for the Mortgage Bankers Association."

http://www.mercurynews.com/mld/mercurynews/classifieds/real_estate/14893575.htm?source=rss

-I didn't realize it was this great of a percentage. Is most of this flipper losses waiting to happen?

Pat

6/26/2006 09:25:00 AM  
Anonymous Anonymous said...

Reinvestor..what percentage of that trillion dollar figure do you think is going to be written off by flippers?

Pat

6/26/2006 09:27:00 AM  
Blogger skep-tic said...

It's probably due to the waive of refinancings over the past few years

6/26/2006 09:28:00 AM  
Anonymous Anonymous said...

Great article. Has put a smile on my face all day. Bub-bye brokers...

EMU

6/26/2006 02:41:00 PM  
Anonymous Anonymous said...

hey everyone, i love this blog!!!

6/28/2006 11:35:00 AM  

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