by Calculated Risk on 4/04/2006 11:00:00 AM

The FDIC released their Spring state economic profiles this morning. Check out your state here.

Here are some excerpts from the California profile on employment, housing and construction jobs.

* Elevated home price growth contributed to strong employment gains in the state’s construction sector which increased 6.7 percent in fourth quarter, compared to 1.5 percent for all other sectors, and accounted for about 1 in 5 new jobs (see Chart 1). But, higher interest rates, reduced housing affordability, and rising building costs may limit new construction and slow job growth in this sector going forward.

* California home prices continued to increase at a robust pace of 21.1 percent in fourth quarter 2005, up from the third quarter and well above the national average. Similar to employment patterns, price gains in Central Valley markets typically topped the state average, but San Diego area home price growth slumped from year-ago levels to the slowest pace among California metropolitan markets.

* Innovative mortgages and investors may be buoying California housing demand. Interest-only and negative amortization loans accounted for 69 percent of non-prime mortgage originations in California in the first 11 months of 2005. During the same period, investors and second-home purchasers accounted for 15 percent of California Alt-A mortgage originations.