The jobs outlook is improving, according to the latest numbers from the Labor Department. The economy added 243,000 jobs in January—much higher than the 125,000 or so most economists expected—driving down the jobless rate to 8.3 percent and boosting hopes for a stronger economic recovery this year.
That's good news for the housing market because more jobs tend to create more housing demand, something the languishing housing market has been lacking for a while now.
But it's not all about the headline numbers. Here's a closer look at other numbers that bode well for housing:
3.9 percent. That's the uptick in construction employment (annualized) versus three months ago, outpacing overall unemployment growth, about 1.8 percent annualized. Construction is a good barometer for the health of the housing market because if builders are confident demand exists, they'll build and hire more.
[Read: Jobless Rate Falls to 8.3 Percent.]
Some of the uptick is likely due to the bit of momentum the sector saw at the end of 2011, says Jed Kolko, chief economist at real estate website Trulia. Gains seen in housing starts in the latter part of 2011 are now showing up in the jobs numbers, he says.
74.5 percent. Employment among 25- to 34-year-olds—a key demographic for housing demand—ticked up slightly in January, following incremental gains in past months. This age group was particularly hard hit by the recession, which forced many who couldn't find jobs to live at home with parents or "double up" with friends. That took a huge bite out of housing demand, part of the reason why so many homes in the country aren't selling.
The flip-side of that is pent-up demand. While unemployment is still relatively high among that age group at around 9 percent, "as soon as [25- to 34-year-olds] start getting jobs, their housing demand will pick up," Kolko says. That should translate into better sales numbers and hopefully help burn through the nation's inventory of homes for sale.
0.4 percent. It's been lagging a bit lately, but job growth in metro areas particularly hard-hit by the housing mess remains a crucial element for housing demand. Job growth in those metro areas had been outpacing national figures, Kolko says, but has tapered off a bit now.
"Longer term, I expect to see job growth strengthen in those hardest hit [areas]," Kolko says. "Home prices have fallen so much [which makes those areas] more affordable for people and businesses."
Overall the jobs report bodes well for the housing market and for Americans' feeling of security. If more people feel secure in their jobs or have recently found employment, it could help those would-be buyers on the sidelines make the leap into homeownership.