Residential construction jobs faced a 41% drop between 2006 and 2011. With homebuilding predicted to return to normal by 2016, housing starts may double over the next four years, Fannie Mae said.
This return to normalcy also implies an improvement in residential construction employment. But many are wondering how many jobs will come out of this homebuilding rebound.
In its latest edition of Housing Insights, Fannie Mae studies the historical relationship between housing starts and residential construction employment coupled with Economic and Strategic Research’s housing starts forecast, to project future homebuilding employment.
If housing starts keep up with expectations and return to normal levels in 2016, it is predicted that residential construction employment will rise to nearly 2.5 million jobs.
Fannie Mae predicts housing construction will recover to a “normal” level of about 1.6 million units in 2016. But what does this mean for homebuilding employment?
Fannie’s forecast predicts that residential construction employment will increase by 412,000 jobs between 2012 and 2016. This 20% rise in homebuilding employment will nearly triple the forecasted pace of total job growth during this time period.
However, the pace of growth will not be quick enough to bring back all homebuilding jobs lost during the housing bust. In 2016, the number of residential construction jobs is expected to remain nearly 1 million jobs below peaks established during the housing boom.
During the housing bubble, housing starts soared, totaling 2.1 million units in 2005. Between 2000 and 2006, homebuilding jobs increased by a third and reached a peak of 3.4 million.
However, the fall of homebuilding employment has been more surprising than its rise. From the years 2006 to 2011, residential construction jobs fell by 1.4 million, a 41% drop.
Although homebuilding employment is finally getting back on track, the number of jobs in the sector has only increased by 6% since it bottomed out in early 2011.