Labor Markets Well on Their Way to Full Recovery in Texas' Largest Metros; Historically Low Inventory Driving Home Prices and Sales

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Jul 01, 2021, 17:54 ET

DALLAS, July 1, 2021 /PRNewswire/ -- The pandemic's increasingly diminished economic effects are the backdrop to a strong labor and housing market recovery that is well underway in Texas' two largest metropolitan regions, according to a new analysis released today by Beacon Economics. Dallas's jobs recovery is nearing its pre-pandemic high, while Houston's recovery is picking up steam.

As of May, the most recent data available, the Dallas-Plano-Irving MD has recovered 95% of the jobs it lost in the unprecedented declines of early 2020. The Houston MSA has recovered 64% of jobs lost in that region. By this measure, Dallas is leading and Houston trailing the state's overall job recovery rate of 72%. Smaller metros such as Austin (105% job recovery) and San Antonio (98% job recovery) are even further ahead.

The unemployment rates in both Dallas and Houston have also been steadily falling, although in Houston, the latest decline is at least partly due to a contraction in the labor force. In May, Dallas's unemployment rate fell to 5.5% even as the region added 11,400 workers to its labor force. "This is a particularly strong indicator since adding to a labor force can put upward pressure on unemployment rates because more people are actively looking for work and being counted among the unemployed," said Taner Osman, Research Manager at Beacon Economics and one of the report authors. "What this tells us is that the number of new people entering Dallas's workforce is being completely offset by the number who are finding jobs and being hired."

Houston's unemployment rate also declined in May, to 7.1%, but at the same time, the region saw 3200 workers leave its labor pool, which puts downward pressure on unemployment as fewer people are counted among those ranks.

Housing market activity in Dallas and Houston can be described as red hot, driven by high demand and historically low inventory. Single-family home prices in just the first quarter of 2021 appreciated 14.1% in the Dallas-Plano-Irving MD and 13.3% in the Houston MSA. In terms of home sales, Houston has surged ahead with annual sales of existing single-family homes soaring 17.9% from the first quarter of 2020 to the first quarter of 2021. Sales in the Dallas MD grew 1.8% over the same period.

SOURCE BEACON ECONOMICS