The region’s housing market recovery has emerged as a bright spot for the Washington region, and a buoy for the finance sector.
Over the past 12 months, nearly 3,800 jobs have been added in the financial activities subsector. The 2.8 percent expansion locally is more than triple the national growth rate of 0.9 percent over the past year.
The growth in the region’s finance industry is no doubt aided by the surge in mortgage originations and refinances. The total dollar volume of residential lending activity in the D.C. area ranked as the fourth strongest nominal growth for a metropolitan area in the country, with an adjusted annual increase of $19 billion, and the highest rate of growth for primary markets, up 60 percent year-over-year in the region. The healthy local housing market is spurring this outsized increase in lending activity.
The relatively strong recovery of the housing market is evident in the statistics. According to the most recent Case-Shiller home price index, home prices here are up by more than 15 percent from the trough in March 2009, an improvement that is more than twice as strong as the U.S. average. And overall home sales volumes are up sharply, 40 percent higher year-over-year, in comparison to just a 9 percent increase nationally.
A virtuous cycle, providing a counter-balance to federal spending cuts, could be blooming. The change in home sales is usually followed by a change in job creation by four to six quarters, so the improvements in D.C.’s housing market could signal future job growth.
Erica Champion is a senior real estate economist with CoStar Group in Washington.