Jobless claims are the lowest they've been in years. And that's great news for the industry
On the July 27th episode of my Lykken on Lending radio show, we discussed briefly the fact that jobless claims are the lowest they've been in decades. As months goes by, the 12-month moving average continues to improve as well. Fewer and fewer people are saying that they are out of work.
Of all the metrics we use to evaluate the health of our industry, this is perhaps the best news we can hear. Sure, it's important to pay attention to rates, home prices, new and existing home sales, and so on. But all of these numbers are temporary – and somewhat more fleeting – signals regarding the state of the mortgage industry. If we're trying to build sustainable businesses, we want to know how the market is going to be several years into the future. And I don't think there is a stronger indicator as to whether people will be purchasing homes than whether or not they are getting back to work.
One of the topics that often comes up in the industry is the trend toward renting among millennials. But as I and many others have mentioned before, I think this may have less to do with the preferences of millennials than it does to do with the opportunities of millennials. Since the recession, millennials, more than any other group, have had trouble finding sustainable employment – and that could very well account for the delay in home buying. And that's just one example. Across the board, I think it's safe to say that people aren't going to be looking for homes if they don't feel comfortable with their employment status. If we can get people back to work, we can get them back in their homes.
Of all the metrics we use to evaluate the health of our industry, this is perhaps the best news we can hear. Sure, it's important to pay attention to rates, home prices, new and existing home sales, and so on. But all of these numbers are temporary – and somewhat more fleeting – signals regarding the state of the mortgage industry. If we're trying to build sustainable businesses, we want to know how the market is going to be several years into the future. And I don't think there is a stronger indicator as to whether people will be purchasing homes than whether or not they are getting back to work.
One of the topics that often comes up in the industry is the trend toward renting among millennials. But as I and many others have mentioned before, I think this may have less to do with the preferences of millennials than it does to do with the opportunities of millennials. Since the recession, millennials, more than any other group, have had trouble finding sustainable employment – and that could very well account for the delay in home buying. And that's just one example. Across the board, I think it's safe to say that people aren't going to be looking for homes if they don't feel comfortable with their employment status. If we can get people back to work, we can get them back in their homes.
