U.S. Gains 236,000 Jobs in March as Real Estate Sees Losses

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U.S. employers added just 236,000 new jobs in March as hiring slowed nationwide, but the real estate and construction industries were one of the few sectors to post job losses.

The real estate, rental and leasing sector saw employment decline by 7,200 jobs, from 2.42 million in February to 2.41 million in March, according to a report from the U.S. Bureau of Labor Statistics (BLS). Construction employment also slipped, losing 9,000 jobs in that same period.

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“Real estate activity for both residential and commercial is down compared to a year ago,” Lawrence Yun, chief economist for the National Association of Realtors (NAR), said in a statement. “As a result, employment in the sector is responding to market conditions.”

Overall, hiring in March slowed nationwide compared to the 311,000 new jobs added in February as the Federal Reserve attempts to control inflation by raising interest rates, which has increased the price of a mortgage for home buyers, CNBC reported. 

Those higher borrowing costs could keep would-be-home owners in rentals, resulting in a need for fewer real estate sales agents, Carlos Vaz, the CEO of property investment firm Conti Capital, said in a statement.

“Some individuals may choose to rent instead of entering the housing market, which could result in fewer job opportunities in the industry,” Vaz said. “The real estate market is also sensitive to economic fluctuations.”

And membership at the trade group NAR is expected to drop through 2023 and 2024 as the housing market cools, The Real Deal reported. But even with the slip, both real estate and construction job totals remain higher in March compared to last year.

The 2.42 million jobs the real estate, rental and leasing sector had in March 2023 was 60,300 more than the 2.36 million it had in March 2022, according to BLS. And the construction industry was similar: Its 7.88 million jobs in March is 196,000 jobs more than the March 2022 total of 7.69 million.

Vaz believed that the real estate industry grew too fast in 2022, but that demand for real estate brokers and agents will continue as the sector adjusts “to a new norm.”

“In general, there will always be demand for the best professionals,” Vaz said. “Despite the interest rate increase, there is still a demand for jobs in the real estate sector. There is a reshaping happening, and there will [be] additional changes as jobs in the sector grew too fast in the last year.”

Celia Young can be reached at cyoung@commercialobserver.com.