Housing activity as a whole showed strong signs of improvement in 2012. However, employment within the industry remained close to post-bubble lows, according to a research report from Goldman Sachs.

Residential investment-related jobs are totaling about 2.6 million, staying nearly 30% below the 2006 peak, according to data from the investment bank. This sluggish growth rate is attributed mainly to the only-modest recovery in residential construction.

Residential investment-related jobs closely parallel residential investment activity, as seen in the chart below.

Residential investment activity experienced a deeper decline than most other sectors of housing and, therefore, is seeing a more sluggish recovery.

By viewing the above chart, the cause of the sluggish employment growth is evident: construction activity remains far below pre-crisis levels and has shown very minor signs of improvement.

Goldman Sachs’ analysts expect that real residential investment will continue to grow at a roughly stable 10% to 15% in the next two years.

The analysts considered two separate econometric models: a correct model of national-level real residential investment and residential investment-related employment and a state-level panel analysis of the relationship between construction activity and employment. 

Both point to an increase in the rate of housing-related employment growth in 2013 and 2014, compared to 2012. Estimates are reaching as high as 25,000 to 30,000 per month, according to the report. However, analysts believe it will still take between seven and nine years to return to peak levels. 

To see a full breakdown of job losses and recovery in residential investment-related industries, click on the image below.