In light of recent economic news regarding stagnant wages it’s interesting to take a closer look at CoreLogic’s most recent home price statistics for. CoreLogic, a real estate research and data firm, reported home prices rose by 5.7 percent in January compared to January of 2014 and 1.1 percent highertepid wage growth more renters compared to December of last year. It’s interesting to contrast the still strengthening real estate market with tepid gains in income.

The Department of Labor reported there were 295,000 new jobs created last month but 59,000 of those went to bar and restaurant workers. Hourly wage gains are higher but if home prices are continuing to surge it’s surely not due to this particular service sector.

What the economy needs to see is a strong, continued increase in real lower wage earnings while rates are near historic lows, allowing those workers to buy and finance a first time home purchase. Doing so keeps the real estate engine moving and sellers of existing homes have a market in which to sell. Yet with hourly wages only up 0.1% it seems difficult to imagine a wave of first timers entering the market, especially if rate increases wipe out the advantages higher earnings provide. Fewer consumers will be able to qualify for a mortgage.

As that information relates to real estate investors however, that’s good news. The economy does continue to expand, although perhaps with lower paying jobs at this stage, but it still means those in the workforce need a place to live. And that means renting, not buying. Interest rates have been on a slow, steady climb over the past several weeks and after today’s unemployment report  we could soon see the average 30 year fixed rate burst through the 4.00% barrier while at the same time wages make very few gains. If you’re a real estate investor, you can expect lower vacancy rates and higher rents. Not a bad way to start the year.