Rising mortgage rates have reduced hiring for real estate-related jobs across Southern California.
Hiring at construction, real estate and finance companies across the Southland created 600 jobs in August — half the average number of workers added in each of the past 12 months, the Orange County Register reported.
Real estate-related companies in Los Angeles, Orange, Riverside and San Bernardino counties hired 14,900 new employees in the last 12 months, up 2.3 percent year-over-year.
That’s a significant recovery in hiring from the 2020 pandemic lockdowns and almost triple the 0.82 percent average annual job growth rate since 1990.
But adding 600 workers at real estate-related companies in August was slow compared to the average 1,240 workers added each month last year. In 2018-19, before the coronavirus pandemic, companies were hiring 1,140 people a month.
A construction boom, for both housing and infrastructure projects, has kept construction workers busy, even as the overall hiring pace is cooling.
The region had 381,600 construction workers after adding 1,800 in August, a total that grew by 17,700 over the past year. According to the register, an average of 2,260 employees per month have been hired since the coronavirus economic slowdown in 2020.
But workers handling property sales haven’t fared as well.
Rising mortgage rates this year have pushed home buying back to Great Recession levels. Interest rates also dried up homeowners’ ability to refinance mortgages. Higher financing costs slowed down the lucrative financing business for real estate sellers and lenders alike.
Employment at real estate and financial firms fell 1,200 to 293,600 in August — 2,800 fewer than in a year. That’s a significant reversal from the hiring average of 400 per month during the pandemic recovery.
August employment for all real estate-related companies in Southern California fell back to pre-coronavirus levels. But it’s a split picture: Construction was 3 percent above February 2020 levels, while employment at real estate and financial firms was 4 percent below.
Real estate and finance workers are early victims of the Federal Reserve’s attempt to manipulate inflation rates to 40-year highs. The next residential construction sites could be the next.
– Dana Bartholomew
