The success of the job market and real estate industry are closely linked, and as companies continue to expand payrolls across the country, some experts anticipated a quick housing market recovery. However, this has not been the case nearly six years after the real estate bubble burst.
During the month of June, companies added close to 160,000 new employment positions, but new data indicates that the majority of opportunities coming back to the marketplace are low-wage jobs, according to a report from the National Employment Law Project.
The report indicated that low-paying jobs, which earn workers between $7.69 and $13.83 per hour, expanded 2.7 times faster than mid- and higher-wage jobs.
"The recovery continues to be skewed toward low-wage jobs, reinforcing the rise in inequality and America's deficit of good jobs," said Annette Bernhardt of NELP. "While there's understandably a lot of focus on getting employment back to pre-recession levels, the quality of jobs is rapidly emerging as a second front in the struggling recovery."
The industries responsible for adding the most jobs during the past two years include food services, retail and employment professionals, the report said. Specifically, these sectors added an estimated 1.7 million positions during this period.
At the same time, higher-paying jobs in the manufacturing, finance, insurance and real estate sectors failed to expand at rates parallel the the service industry.
Logistics make it difficult to purchase homes
Although it's good to see the job market building momentum, low-paying positions can make it difficult for prospective buyers to qualify for a mortgages. For example, an individual making $10 per hour makes roughly $20,800 per year after taxes. In addition, those with mid-range salaries make close to $28,000 per year. Neither of these salaries put consumers into positions to purchase property in many housing markets.
Housing affordability declines
In the second quarter, an estimated 73.8 percent of homes sold were affordable to families making the national median income of $65,000, according to a report from the National Association of Home Builders.
Although this was a large share, it was a slight decline from the previous three-month period, when 77.5 percent of properties were considered affordable the median income earners.
As the job market continues to expand in the lower-paying areas, this could negatively impact housing affordability in the near future.