- March 28, 2024
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There's good news and there's bad news.
According to Robert Dietz, chief economist for the National Association of Home Builders, the bad news is the overall economy growth rate isn't moving very fast. The good news is despite this, more jobs are being created.
Dietz, who is also the senior vice president for economics and housing policy for NAHB, was the main speaker during the Volusia Building Industry Association's lunch and learn meeting on Wednesday, Aug. 23. Dietz discussed the national, state and local economic outlook as well as the changes in unemployment rates and the housing market.
Florida Sen. Dorothy L. Hukill, Port Orange's former mayor, was also in attendance.
"We're here because these are our local groups and we're going to lunch and learn," Hukill said. "This is what it's all about. We want to talk with constituents, find out what's important to them and we're going to talk about what's happening locally.
Locally in Port Orange, the unemployment rate is at 3.80%, a .20% increase from last month but a .8% decrease from last year, according to the Bureau of Labor Statistics. According to the U.S. Census Bureau, Port Orange's total housing units number for 2015 was 28,549, which is an increase from the 2010 amount of 27,267.
The Florida Department of Economic Opportunity estimated that within Flagler and Volusia counties, the workforce will increase from the 2016 total of 208,874 to 231,603 in 2024 — a 10.9% increase.
Dietz explained that the overall growth within the economy was only at 1.6% in 2016.
"Not many economists believe the economy can grow faster than 2.5%," Dietz said, adding that the "current growth cycle, which started at the end of the Great Recession, is aging."
However, Dietz said that, despite the sluggish economy, 2 million jobs have been created, which help support housing demand. According to Dietz, around 6% of the jobs were lost during the Great Recession. He noted that there are now around 140,000 jobs being added to the overall economy every month, something Dietz said is helping to support the housing demand, especially when it comes to rentals.
"The key to continuing economic growth, therefore sustaining housing demand, is increasing the labor force," Dietz said.
Dietz said that while the labor force has been declining throughout the past decade or so there has been more stabilization within the last year. According to Dietz, this means more workers are being brought into the labor force, which is helping to drive economic growth. Dietz added there has also been more wage growth, meaning more potential buyers.
Dietz said the 30-year fixed rate mortgage is expected to go higher than 5% sometime in 2018-2019, though this is still lower than in the past.
Dietz said a rise in the fixed mortgage rate could take a toll on housing demand, specifically when it comes to millennials who have been renting and may not want to pay the higher amount.
"That's going to be kind of the challenge over the next couple of years," Dietz said. "Making that argument that these are still historically low rates even as they've increased."