There’s decent news out of the US housing market, with the nation’s second-largest home builder, Lennar Corp., reporting solid second-quarter profits and rising levels of orders and backlogs. During the quarter that ended in May, Lennar’s profit jumped 19% compared to the same quarter of 2015. The number of new homes ordered rose 10%.
As we’ve said before, the homebuilding industry is crucial to the US economy. So it’s heartening to see a very solid spring selling season, with sales of existing and new homes showing some pep along with home prices.
This isn’t just good for the economy, but for workers as well. The backlog of orders for homes at Lennar would suggest there’s still more work coming down the pike in US residential construction, an industry dominated by the kind of working-age men who have been showing very weak labor force participation lately. That’s a good thing, since the ugly jobs report for May showed sustained softness in construction.
And what’s more, there is talk about wage increases. In a conference call with analysts after Lennar’s earnings, the president of the company said “we are seeing some labor price increases out in the field and that’s flowing through our products.” Perhaps higher wages will coax more people back into the labor force, something that’s crucially important for US growth.