Will the Millennials save America's housing market from long-term downsizing? We investigated.
Given that most of us will need a job to buy a home, we married homeownership
data from the U.S. Census Bureau's American Community Survey with the Bureau of Labor Statistics' (BLS) projections for job growth between 2012 and 2022.
By organizing available data on homeownership rates by profession, we can see 1) which jobs are projected to be available for Millennials and other new arrivals to the labor scene (recent immigrants) and 2) whether they're the sorts of jobs that homeowners tend to have. Although we can't predict that the current correlations between profession and homeownership will remain the same, the results of our analysis offer some interesting insights.
What we find is that many of America's fastest growing careers (in terms of numbers of workers)
have average or below average homeownership rates. At the same time, the professions with
higher homeownership rates are generally headed for average or subpar growth.
In fact, most of the projected job openings over the next 10 years will be in low-wage/low-skill occupations that tend to have very low homeownership rates (the U.S. average is about 64 percent). The top occupations for projected job openings (with homeownership rates shown in parentheses) — retail salespersons (55.6 percent), food preparers (27.2 percent), cashiers (36.8 percent), and waiters and waitresses (26.8 percent) — all have homeownership rates under 56 percent. Among the top projected job growth occupations, only registered nurses (74.9 percent), general and operations managers (73.7 percent), accountants and auditors (76.7 percent), first-line supervisors of office and administrative support workers (71.5 percent), and elementary school teachers, except special education (77.2 percent), have homeownership rates above the national average.
There are definite trends by job category, particularly when we look at the typical entry-level education by projected job growth and homeownership rates. A large portion of projected job growth comes in low-education occupations, and these occupations have lower than average wages and homeownership rates. The BLS projects that about two-thirds (33 million out of 50 million) of job openings over the next decade due to replacement and job growth will be in occupations with typical entry-level education at or below a high school diploma or equivalent.
That said, we found that jobs in the professions with higher homeownership rates (70 percent or more) are likely to see average growth (10 percent) or less. This includes engineers (79 percent homeownership rate), lawyers (78 percent), doctors (75 percent), and computer and math professionals (68 percent). In some cases, high homeownership professions, such as business managers (76.3 percent), have subpar job growth rates (7.6 percent).
The big exception in this group is registered nurses, who have a 75 percent homeownership rate and projected job growth rate of 19 percent. Although other healthcare support occupations (non-registered nurses, psychiatric nurses, home health workers) are also projected to grow rapidly (34 percent), they have subpar (43 percent) homeownership rates.
What about professions with average homeownership rates? About 62 percent of production workers (factory jobs, assemblers, welders) own homes; but BLS projects only 2 percent growth in this category. Sales and retail (61 percent homeownership rate) payrolls continue to lose ground to the internet and are projected to grow only 7 percent.
Interestingly, the shipping and packaging workforce (on the other side of the internet supply chain) are also expected to see less than average job growth (9 percent) and already have a less than average homeownership rate (59 percent).
A few words of caution. As mentioned above, projections based on this sort of analysis assume that homeownership rates for the various professions will stay constant. Also, it's possible that a lucrative new profession could appear out of nowhere and transform the labor and housing markets. (Think Silicon Valley in the 1980s.)
Nevertheless, unless there is a significant change in the job market or wages for the fastest growing professions, the current jobs outlook does not suggest a major uptick in domestic homebuying power going into the next decade. This also suggests the debate over how best to support sustainable homeownership will continue to be important in coming years.
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