It’s no secret that housing prices are strongly correlated with employment growth. Demand for homes increases when jobs are created and this demand pushes housing prices up. It’s no the only factor — interest rates are very important as well. But, all things created equal, when new jobs come to town, housing prices go up.
Today, the Texas Workforce Employment released the latest unemployment statistics for the state. The news: unemployment dropped to 4.1%. This is very low. In fact, it’s lower than the peak of the dot com boom. It’s also lower than the peak of the wall street boom of the early 90’s. It’s even lower than the peak of the Texas oil boom of the 1980s. Believe it or not, the current rate of Texas unemployment is the lowest reading since 1976. And in Austin, the unemployment rate is 3.2%: nearly a full point lower than the rest of the state.
Over the last year, 240,000 new jobs were created in Texas. If interest rates were lower, price appreciation would likely be very strong. With the uncertainty around rates and weak appreciation around the rest of the country, the strong Texas job numbers should help support continued market appreciation throughout the rest of the year.