Rising mortgage rates have reduced hiring in real estate-related jobs across Southern California.
Hiring in construction, real estate and finance businesses across the Southland added 600 jobs in August – half the average number of workers added in each of the past 12 months, the Orange County Register reported.
Property-related businesses in Los Angeles, Orange, Riverside and San Bernardino counties added 14,900 workers in the last 12 months, a 2.3 percent increase compared to the prior year.
That’s a marked hiring rebound from the 2020 pandemic lockdowns and nearly triple the average annual employment growth of 0.82 percent since 1990.
But the August hiring of 600 workers at real-estate-related businesses was slow compared with the average 1,240 workers added each month over the past year. In 2018-19, before the coronavirus pandemic, companies hired workers at a 1,140 monthly pace.
A building boom, both for housing and infrastructure projects, has kept construction workers busy even while the overall hiring pace cools.
The region had 381,600 construction workers after adding 1,800 in August, a total that grew by 17,700 in the past year. Recovery hiring since 2020’s coronavirus economic chill averaged 2,260 a month, according to the Register.
But workers handling real estate sales haven’t fared as well.
Soaring mortgage rates this year slashed homebuying to Great Recession levels. The rates also dried up the ability of homeowners to refinance mortgages. Higher financing costs slowed the lucrative financing business for real estate salespeople and lenders alike.
Employment at real estate and finance firms dropped 1,200 to 293,600 in August — down 2,800 in a year. That’s a sharp reversal from hiring that averaged 400 a month during the rebound from the pandemic.
August employment for all Southern California property-related businesses fell back to where it was before the coronavirus hit. But it’s a split picture: Construction was 3 percent above February 2020 levels, while employment at real estate and finance firms was 4 percent below.
Workers at real estate and finance firms are early victims of the Federal Reserve’s quest to tamper inflation rates at 40-year highs. Those working residential construction sites could be next.
— Dana Bartholomew
Read more
Residential
Los Angeles
August home sales rose 8% in SoCal, despite summer slowdown
Residential
Los Angeles
Falling SoCal home sales caused by 46% rise in payments