St. Louis reports drop in unemployment

The local economy appears to be recovering as the latest job numbers show that unemployment is going down. Are we heading back to something approximating the pre-pandemic normal? And what impact will this have on the world of residential real estate?

The St. Louis Post Dispatch reports that unemployment in the St. Louis metro area has gone down below 5% for the first time since April. The coronavirus and lockdowns caused unemployment to skyrocket up to 11.6% locally and 14.7% nationally. As of October of this year, the last month for which data is available, unemployment is now back down to 4.9% in St. Louis.

This continues the trend from over the summer and is a significant improvement over September, when unemployment was at 5.8%.

It should be added that the news is not unambiguously good. The low percentage unemployment numbers are due in part to a decrease in the workforce participation. According to data from the Bureau of Labor Statistics, fewer people in St. Louis are currently looking for a job. Compared to October of last year, around 52,000 people have left the job market and are no longer seeking employment.

Nevertheless, compared to the dire warnings back in May, the local economy is rallying. Towards the beginning of the pandemic, economists and realtors expressed concern that a collapsing job market would ruin the residential real estate market, as people lost their jobs and defaulted on their mortgages. That has not been a widespread issue.

Bottom line is a strong job market is good news for St. Louis real estate. More people working means more potential homebuyers. It means more current homeowners paying off their mortgages and getting out of forbearance. Developers are more willing to invest in stable communities where there are signs of life. Low unemployment is one such sign.

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