Can Housing Growth Create Jobs? - Economists constantly say that a healthy job market is needed in order to see a tangible housing recovery, but can the process work in reverse? In other words, can growth in the housing market lead to job creation?

Recent statistics would indicate the answer is yes, especially in the construction and home improvement industries!

According to data recently released by the U.S. Bureau of Labor Statistics, the construction industry created 30,000 jobs in December 2012. Of those, 13,000 related to construction of buildings, and 12,000 were for residential specialty trade contractors. Simply put, new home construction is on the upswing, so therefore, additional builders are needed.

As home prices continue to rise, but mortgage rates hover near all-time lows, the housing industry gets busier. With that added demand, we’re more likely to see an increase in home construction this year. That's good news for home builders and trade contractors, who are already excited to be back to work. In fact, just last week, the National Association of Home Builders announced that builder confidence in the market for newly built single-family homes is at its highest level since April 2006!

But, builders aren't the only ones who are benefiting from the recent rise in new home construction.

Companies like Fastenal, who provide industrial and construction supplies, and Lumber Liquidators Holdings, who sell hardwood flooring, have seen the value of their stock increase in recent months. If the construction industry continues to show signs of growth, they can expect a healthy stock report in 2013 as well.

But the job growth doesn’t end at construction firms’ doors!

Like builders, many employees at home improvement stores lost their jobs when the housing market collapsed in 2008. Lowe's and Home Depot experienced significant drop offs in sales in recent years, so they were forced to downsize their workforces.

But, as consumer confidence in the economy and the housing market has gone up, these businesses have seen a resurgence of homeowners wanting to remodel their homes – not to mention additional business from contractors who are building new homes. Because Lowe’s anticipates such a boost in business in 2013, the company just announced that it plans to hire 45,000 seasonal employees and 9,000 permanent part-time staff in the coming months.

Data released last week by the Joint Center for Housing Studies at Harvard University suggests that spending on home-improvement projects will increase 10.6% in the first quarter of 2013. Economists at the center also predict 16.8% and 19.7% increases in the second and third quarters as well. That's an estimated annualized value of $145.5 billion spent on home improvements and remodeling projects by the third quarter of this year. So, while it continues to be true that a growing labor market can boost housing recovery, it also seems that the process works in reverse – at least for two industries!

As new home construction increases, and the number of remodeling projects at existing homes rises, builders and retailers in the home construction industry will see a higher a demand for their services – meaning that more people will be able to get back to work. It’s a win-win!