The Rise of Part-Time Employment

“Builders have stepped up and built an incredible number of homes in response to soaring rents during the pandemic, and renters are now seeing the benefits. Now is a great time for renters to find a deal, with more new apartments hitting the market than at any time in the past several decades. Rents are still growing, but it’s a far cry from the steep rent hikes of two or three years ago, and renters will find sweeteners being offered by more than half of rentals in some places. A slowing job market and lower mortgage rates could mean falling rents if the current trends hold.”

-Skylar Olsen, Chief Economist at Zillow

Hi Nuvo Community,

The Shift Toward Part-Time Work

Setting aside the obvious impact of higher mortgage rates and housing unaffordability, there’s another important factor negatively impacting ‘would-be’ home buyers. Part-time work has been steadily gaining traction as more individuals seek flexible employment opportunities that allow them to balance work with personal commitments. This shift is evident in various sectors, including retail, hospitality, and, notably, the gig economy.

However, the rise in part-time work is not solely due to preference. Economic conditions, including job market fluctuations and uncertainty, have forced some individuals to accept part-time roles in lieu of desired full-time positions. As companies become more cautious in hiring practices during economic downturns, full-time job opportunities can become scarce, pushing workers toward part-time employment. This situation reflects broader economic challenges and highlights the need for stable job growth.

Our analysis of Google searches for "Part Time Job" and year-over-year changes in part-time employment indicates a growing interest in part-time work (see chart below). In fact, part time job searches hit the highest search frequency ever at the beginning of 2024. The data suggests that part-time jobs are increasingly on people's minds, perhaps as a response to economic uncertainties or changing personal circumstances.

The Gig Economy's Role

The gig economy has played a pivotal role in the rise of part-time work. Companies like Uber, Lyft, DoorDash, and Instacart have revolutionized how people engage with work, offering on-demand opportunities that cater to a wide range of skills and availability. These platforms provide a flexible work environment that appeals to many seeking supplementary income or those transitioning between full-time roles.

In an era marked by economic uncertainty, the gig economy offers a lifeline for many workers. As traditional job markets face challenges, more people are turning to gig work to bridge income gaps or explore new career paths. This shift is not just a trend; it's a structural change in the workforce, where the flexibility of gig work becomes a valuable asset. Since coming out of Covid, part time employment has only increased in the US. As you’ll see in the chart below with employment data from the Federal Reserve, it’s historically common for part time employment to fluctuate throughout the year. However, part time employment has only grown since 2022.

Implications for the Housing Market

The shift toward part-time work and the gig economy also has significant implications for the housing market, particularly in the context of renting versus buying. The rise of flexible work arrangements and uncertain income streams has led many workers to favor renting apartments over purchasing homes.

Renting vs. Buying

For individuals engaged in part-time or gig work, renting often presents a more viable option. Renting provides flexibility and less financial commitment compared to buying a home, which requires a stable income and long-term financial planning. The uncertainty inherent in gig work can make securing a mortgage challenging, pushing more people toward renting as the preferred housing option.

Implications for Apartment Investors

For apartment investors this trend may present an opportunity long term. The increasing demand for rental properties due to fewer qualified borrowers should lead to higher occupancy rates and stable rental income.

Implications for the Housing Market

As part-time work and the gig economy continue to evolve, they offer a glimpse into the future of employment and housing. The shift toward flexible work arrangements aligns with broader societal changes, including the desire for work-life balance and the pursuit of diverse income streams. For businesses and investors, this means adapting to a workforce and housing market that values flexibility and autonomy.

All the best,

Yuri - Your Real Estate Investigator

Credit: Brian Underdahl, Chief Executive Officer, Nuvo Capital Partners

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