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Private Water and Sewer Systems in 2025 New Single-Family Homes – Eye On Housing

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The share of new single-family homes built with individual wells and septic systems increased in 2025 compared to the previous year. According to NAHB’s analysis of the Census Bureau’s Survey of Construction (SOC), approximately 10% of single-family homes started in 2025 were served by individual (private) wells, and 17% relied on individual septic systems.

Nationally, most new homes were connected to public water systems, which include community or shared supplies/wells. The remaining 10% were built with private wells, increasing one percentage point from the previous year.

The share of private wells significantly differed by Census division.  In New England, where median lot size is double the national median, 42% of new single-family homes relied on private wells, making it the division with the highest rate in the nation. The East North Central division followed with 26%, while the Middle Atlantic stood at 15%. The South Atlantic region also exceeded the national average, with 13% of new homes using private wells. In stark contrast, private wells were uncommon in the East South Central, West South Central and Pacific divisions, where they accounted for one to two percent of new homes started.

For sewage disposal, 83% of new single-family homes in 2025 were connected to public sewer systems, which include community or shared sewage/septic systems. The remaining 17% utilized individual septic systems, one percentage point higher than the previous year. As with private wells, the usage of individual septic systems varied significantly by region.

New England led the nation with 52% of new homes using individual septic systems.  The East South Central (33%), East North Central (27%), and South Atlantic (23%) divisions also reported shares above the national average. In contrast, lower usage was recorded in the Mountain (9%) and West North Central (9%) divisions, while the Pacific and West South Central divisions had the smallest shares, at 5%, respectively.

Compared to 2024, five of the nine Census divisions experienced an increase in the use of individual septic systems with four of the divisions falling below the national average of 17%. East South Central in particular saw a large increase of 8-percentage points as it surpassed East North Central as the division with the second largest share of individual septic systems. New England remained the largest shareholder with 52%, a 3-percentage point increase. Only Pacific and East North Central saw declines in shares of 2- and 1-percentage points, respectively.



This article was originally published by a eyeonhousing.org . Read the Original article here. .

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Remodeling Market Sentiment Remains Stable in Third Quarter Despite Headwinds – Eye On

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In the third quarter of 2026, the NAHB Remodeling Market Index (RMI) posted a reading of 62, up one point compared to the previous quarter. The RMI has remained within a narrow band between 59 and 70 for the past four years. Remodeler sentiment remains the standout sector within the housing industry, when compared to its single-family and multifamily counterparts.

Despite sentiment remaining stable, remodelers report that economic uncertainty is making some potential customers hesitant to move forward with projects. Labor shortages, exacerbated by immigration enforcement and competition from data center construction, are extending the time it takes to complete projects. Nevertheless, remodeling is gaining share in the overall construction market, as it is somewhat less sensitive than new construction to the current elevated interest rates. NAHB’s projection for remodeling activity will remain stable in 2026 and grow slightly in 2027, which is consistent with today’s reading.

The RMI is based on a survey that asks remodelers to rate various aspects of the residential remodeling market “good”, “fair” or “poor.” Responses from each question are converted to an index that lies on a scale from 0 to 100. An index number above 50 indicates a higher proportion of respondents view conditions as good rather than poor.

Current Conditions

The Remodeling Market Index (RMI) is an average of two major component indices: the Current Conditions Index and the Future Indicators Index. 

The Current Conditions Index is an average of three components: the current market for large remodeling projects ($50,000 or more), moderately-sized projects ($20,000 to $49,999), and small projects (under $20,000).

In the third quarter of 2026, the Current Conditions Index averaged 70, which remained unchanged for the third consecutive quarter. The component measuring large remodeling projects increased two points to 66, while the small projects component inched down one point to 73, and the moderately-sized projects component decreased two points to 71.

Future Indicators

The Future Indicators Index is an average of two components: the current rate at which leads and inquiries are coming in, and the current backlog of remodeling projects. 

In the third quarter of 2026, the Future Indicators Index averaged 54, up two points from the previous quarter. Both the component measuring backlog of remodeling jobs and the current rate at which leads and inquiries increased two points to 56 and 53, respectively, for the quarter.

For the full set of RMI tables, including regional indices and a complete history for each RMI component, please visit NAHB’s RMI web page.



This article was originally published by a eyeonhousing.org . Read the Original article here. .

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ARM Share Increased as Mortgage Rates Spiked – Eye On Housing

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Mortgage application activity declined as the 30-year fixed mortgage rate rose sharply. The Mortgage Bankers Association’s (MBA) Market Composite Index, a measure of total mortgage application volume, decreased 7.7% month-over-month in September on a seasonally adjusted basis. Compared to a year ago, total mortgage applications were lower by 35.4%. Higher fixed mortgage rates contributed to a rise in applications for adjustable-rate mortgages (ARMs), which increased 7.6% month-over-month. As a result, the ARMs share of total applications increased to 9.3%.

The monthly decline occurred in both major components. Purchase applications decreased 1.3% from August, while refinance applications declined 16.5%. Relative to September 2025, purchase and refinance activity were also down 11.6% and 54.7%, respectively.

Market activity continued to slow as the average contract rate for a 30-year fixed-rate mortgage rose significantly in September. The mortgage rate jumped 28 basis points (bps) to 7.1% and was 64 bps higher than a year ago.

The average contract interest rate for 5/1 ARMs was 6.2% in September. The lower initial interest rate and monthly payments made ARMS relatively more attractive to borrowers, contributing to a 7.6% increase in ARMs applications during the month. Nonetheless, compared to a year ago, ARMs applications remained 40.1% lower. As a result, the ARMs share increased 1.4 percentage points to 9.3%. Meanwhile, applications for fixed-rate mortgages declined 9.1% month-over-month and 34.8% year-over-year.

Interestingly, the overall loan size increased 1.4% to $380,500. The increase was driven primarily by purchase loans, for which the average loan size increased 1.1% to $445,800. Meanwhile, the average refinance loan size edged down 1.2% to $279,500, while the average ARMs loan size declined 2.9% to $896,800.



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Mortgage Rates Rise as Treasury Yields Top 5% – Eye On Housing

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Mortgage rates rose sharply in September as multiple factors applied significant upward pressure on the U.S. treasury yields. According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.86% in September, up nearly 20 basis points (bps) from August. The recent increase effectively erased the improvement in mortgage rates over the past year, with the 30-year mortgage rate reaching 7.03% by the end of the month. Compared to a year ago, the average rate is higher by 51 bps. The 15-year mortgage rate averaged 6.20% in September, up 22 bps from August and 70 bps from a year ago.

The 10-year Treasury yield, a key benchmark for long-term borrowing, jumped 26 bps to an average of 4.94% in September and surpassed 5.00% toward the end of the month. Yields climbed as bond markets priced in a Federal Reserve rate hike ahead of the September FOMC meeting, while weak demand at Treasury auctions added further upward pressure. Broader concerns over elevated oil prices and geopolitical tensions, the U.S. fiscal deficit, and strong competition for capital from AI and hyperscaler investment also contributed to the rise in long-term yields.

The Federal Reserve ultimately raised the federal funds rate by a quarter percentage point at its September meeting, bringing the target range to 3.75% to 4.00%. The Fed noted that economic activity continued to expand at a solid pace, domestic spending remained resilient, and capital investment was robust, while inflation and uncertainty surrounding geopolitical developments remained elevated.



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Two-Story Foyer Share Edges Up in 2025 – Eye On Housing

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In 2025, around a quarter of new homes were built with a two-story foyer, slightly up from 2024, according to data obtained from the Census Bureau’s Survey of Construction (SOC) and tabulated by NAHB. Despite the increase, the market share of two-story foyers has generally trended downward since 2017, with most new single-family homes being built without a two-story foyer both nationally and regionally.

According to the Census, a two-story foyer is defined as the entranceway inside the front door of a house and has a ceiling that is at the level of the second-floor ceiling. In the United States, the share of new homes with two-story foyers slightly rose from 24.6% to 25.6% in 2025, the highest level since 2022, but remains below the levels recorded from 2017 to 2020. This feature is often considered energy-inefficient and is seen as undesirable by both builders and buyers. The declining trend is in line with NAHB’s What Home Buyer’s Really Want, in which recent and prospective buyers rated their preference for 18 specialty rooms. The study found that two-story entry foyers were one of the least desired specialty rooms, with 32% buyers likely to reject a potential home with this feature, and only 13% seeing it as an essential/must-have feature.

In 2025, the share of new homes with a two-story foyer was below 40% in all nine divisions, ranging from 15.1% in the Pacific to 35.8% in the Middle Atlantic. Compared to 2024, the share of two-story foyers declined in four of the nine divisions, including the East North Central, East South Central, West South Central and Mountain. The East South Central division reversed the notable increase seen in 2024, decreasing from 29.6% to 26.1%. Meanwhile, shares in both the East North Central and West South Central fell to their lowest levels since NAHB began tracking this data in 2017.

Meanwhile, shares of two-story foyers rose in the other five divisions. New England increased from 23.2% to 28.2%, the highest share since 2017. The West North Central rebounded from 21.5% to 26.2%, after declining in 2024. The Middle Atlantic continued its upward trend for the third consecutive year, rising from 35.3% to 35.8%. The Pacific rose from 12.8% to 15.1% but still had the lowest share among the nine divisions. The South Atlantic saw a modest increase, from 25.1% to 26.9%.

The share of two-story foyers also varies by home size, with smaller homes generally less likely to have a two-story foyer. In 2025, 65.5% of new homes with 5,000 square feet or more had a two-story foyer, the highest level since 2017. The share was 40.4% for3,000 to 4,999 square foot homes. For homes under 3,000 square feet, the share ranged from 9.9% to 24.5%.

By purpose of construction, owner-built homes had the highest share of two-story foyers at 34.7%, up from 25.5% in 2024 and the highest level since 2017. In contrast, contractor-built homes fell from a share of 31.7% in 2024 to 29.8% in 2025, the fourth consecutive decline and the lowest level since 2017. Built-for-rent homes had the lowest share at 6.5%, down from 9.9% in 2024.



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U.S. Economy Adds 29,000 Jobs in September as Prior Months Are Revised Down – Eye On Housing

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The U.S. labor market cooled in September, with nonfarm payroll employment increasing by just 29,000 as downward revisions erased most of August’s previously reported strength. The unemployment rate edged up to 4.2%, as both employment and the labor force continued to grow. The September report indicates that the labor market is losing momentum, with job growth slowing and unemployment edging higher.

The labor market has lost jobs in seven of the last 21 months.

Wage growth continued to cool, with average hourly earnings rising 3.0% year over year in September, down from 3.1% in August and marking the slowest pace of 2026. Average hourly earnings reached $37.81. The continued deceleration in wage growth points to easing wage pressures, even as the pace of hiring moderates.

National Employment

According to the Employment Situation Summary reported by the Bureau of Labor Statistics (BLS), total nonfarm payroll employment increased by 29,000 in September, following a downwardly revised gain of 133,000 in August. Revisions to prior months were broadly negative, reversing the upward revisions reported last month. The change for July was revised down by 31,000, from a gain of 21,000 reported last month to a decline of 10,000. The change for August was revised down by 29,000, from the preliminary estimate of 162,000 to 133,000. Combined, these revisions subtracted 60,000 jobs from previously reported totals, compared with the 55,000 upward revision reported in the prior month.

Job growth in 2026 has slowed again. Through September, monthly payroll gains have averaged 68,000 based on the current data vintage, down from the 80,000 pace reported through August, reflecting both September’s modest print and the downward revisions to July and August. This compares with an average of just 10,000 per month in 2025 and 122,000 per month in 2024. Over the past 12 months, total nonfarm employment has grown by 496,000, down from the 603,000 gain reported a month ago.

The unemployment rate rose to 4.2% in September from 4.1% in August, though it remains two-tenths of a point below its year-ago level of 4.4%. Over the month, the number of employed persons rose by 406,000, while the number of unemployed persons increased by 78,000. Combined, the civilian labor force expanded by 485,000 in September, continuing the labor force growth that began in August.

Meanwhile, the labor force participation rate—the proportion of the population either looking for a job or already holding a job—rose 0.2 percentage points to 61.8% in September, marking its third consecutive monthly increase. However, the rate remains well below its pre-pandemic level of 63.3% recorded at the start of 2020. Among prime working-age individuals (aged 25 to 54), the participation rate rose 0.3 percentage points to 83.7%, matching its year-ago level.

Outside of construction, employment gains in September were led by health care (+17,000) and leisure and hospitality (+10,000), with manufacturing (+9,000) and transportation and warehousing (+7,600) also expanding. These gains were partially offset by declines in government (-17,000) and information (-10,000).

Construction Employment

Employment in the overall construction sector rose by 11,000 jobs in September, following a gain of 16,000 in August, which was revised down from the 22,000 originally reported. Within the industry, residential construction employment declined by 4,900, reversing August’s gain (also revised down, from 10,700 to 7,900), while nonresidential construction added approximately 16,100 jobs.

Residential construction employment stood at 3.3 million in September, including 923,000 workers employed by builders and remodelers, up from 920,000 in August, and approximately 2.3 million residential specialty trade contractors.

The six-month moving average of residential construction employment changes worsened to a loss of approximately 4,400 jobs per month in September, from a loss of roughly 2,033 in August. Over the last 12 months, residential construction has shed a net of 32,800 jobs, marking the nineteenth consecutive month of year-over-year decline. Despite these losses, residential construction employment remains 1,280,600 positions above its post-Great Recession low. This cushion narrowed from 1,285,500 in August, reflecting September’s employment loss.

Meanwhile, the unemployment rate for construction workers rose to 4.3% in September on a seasonally adjusted basis, up from 4.1% in August but still roughly four-tenths of a point below its year-ago level of 4.7%.



This article was originally published by a eyeonhousing.org . Read the Original article here. .

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Private Residential Construction Spending Posts Broad-Based Gains in August – Eye On Housing

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Private residential construction spending rose in August 2026 following a series of declines during the second quarter of the year. According to the latest construction spending data from the U.S. Census Bureau, private residential construction spending came in at a seasonally adjusted annual rate (SAAR) of $882.3 billion in August, up 1.1% from July but down 4.8% from a year ago.

The increase in spending occurred across all residential sectors, with improvement (remodeling) spending posting the largest monthly gain at 2.5%. Over the year, however, remodeling spending was down 7.4%. Both spending on single-family and multifamily construction increased by 0.2% in August, but decreased 3.5% and 0.6% from a year ago, respectively. The decline in single-family construction spending is consistent with weak builder sentiment reflected in the NAHB/Wells Fargo Housing Market Index (HMI), amid rising interest rates and cost.

The NAHB construction spending index is shown in the graph below. The index illustrates how spending on single-family construction has slowed since early 2024, reflecting the impacts of elevated interest rates and ongoing uncertainty over building material tariffs. Multifamily construction spending growth has also slowed down after the peak in June 2023, with the index largely plateauing since late 2024.

In contrast, improvement spending has been on an upward trend since 2023, supported in part by the aging housing stock and sustained demand for renovation. However, the latest data is consistent with a 2026 soft patch for remodeling.

Private nonresidential construction spending continued its upward trend. August’s spending rose 1.0% to a SAAR of $773.0 billion, although it remained 1.0% below the previous year. Data center construction, a subcategory within office construction, remained strong with spending increasing 7.5% month-over-month and 73.2% year-over-year, due to buildout of artificial intelligence infrastructure. The share of data centers as a percentage of spending on total private nonresidential construction surpassed 10% in July 2026.



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AI Exposure Remains Relatively Low Across Most Construction Occupations – Eye On Housing

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Artificial intelligence (AI) is rapidly changing how work gets done, but its impact varies considerably across occupations. For most construction occupations, near-term exposure to AI remains relatively low. An NAHB analysis of U.S. Bureau of Labor Statistics (BLS) data finds that 45 of 47 selected construction-related occupations—or about 96%—are classified as having “low” or “moderate” relative AI exposure. Only two occupations are classified as having “high” exposure, and none are classified as “very high”. These findings suggest that although AI is likely to change how construction work is performed, its current iteration has a less direct impact on many of the industry’s frontline occupations.

The chart compares relative AI exposure with projected employment growth from 2025 to 2035, illustrating that greater AI exposure does not necessarily correspond to faster or slower employment growth. Among construction occupations, construction managers and construction and building inspectors are the only two classified as having high relative AI exposure. Employment for these occupations is projected to grow 9% and remain essentially unchanged, respectively, from 2025 to 2035. By contrast, employment for solar photovoltaic installers, classified as having moderate exposure, is projected to grow 37%, making it the fastest-growing construction occupation in the group.

Among the selected construction occupations, the low-exposure group includes many hands-on trades and field roles, such as carpenters, construction laborers, roofers, and operating engineers. These jobs rely heavily on physical execution, changing jobsite conditions, safety judgment, coordination with other trades, and interaction with materials and equipment. These characteristics limit the direct reach of current software-based AI into many of the tasks performed in these roles. By contrast, construction managers and construction and building inspectors are classified as high-exposure exceptions, reflecting the greater role of planning, documentation, scheduling, compliance, reporting, and communication in these occupations. This distinction is consistent with findings from NAHB’s Housing Market Index (HMI) special questions, which show that builders primarily use AI for information-intensive tasks such as advertising and marketing, project planning, and project design. These findings complement the occupation-level AI exposure classifications, highlighting the greater applicability of AI to information-intensive functions than to hands-on construction activities.

Relatively low current AI exposure does not mean that construction is insulated from technological change. Instead, AI adoption may initially augment existing work through faster estimating and planning, improved document management, safety analysis, progress monitoring, and decision support. Changes to field operations may emerge more gradually through AI-enabled equipment, robotics, and computer vision. Recent findings from NAHB’s Housing Market Index (HMI) special questions show that builders identified technological advances as a positive long-term force for the housing industry.

Source:

U.S. Bureau of Labor Statistics, Employment Projections Program, “AI Exposure Categories and Employment Projections, 2025–35,” with definitions and limitations documented in the workbook’s Field Descriptions tab.

The BLS supplemental table, AI Exposure Categories and Employment Projections, 2025–35, combines five publicly available data sources to compare detailed occupations based on their theoretical and observed exposure to AI. The measure indicates whether AI technology could be, or has been, used to assist with or complete some tasks performed in an occupation. Importantly, it does not predict job losses, automation, productivity gains, or wage effects. This analysis focuses on 47 SOC construction occupations, excluding extraction occupations, plus construction managers. It does not represent the full workforce employed by construction firms, which also includes adjacent occupations such as architects, engineers, cost estimators, accountants, sales professionals, technology staff, and administrators. In addition, occupations are counted regardless of the industry in which workers are employed.



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Economic Growth Continued Across Most States in the Second Quarter – Eye On Housing

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Real gross domestic product (GDP) increased in 44 states and the District of Columbia in the second quarter of 2026, according to the latest estimates from the U.S. Bureau of Economic Analysis (BEA). State-level growth varied considerably during the quarter, with real GDP growth ranging from a 4.0% annualized increase in New York to a 2.3% decline in West Virginia. The results point to continued regional differences in economic performance, with most states recording positive economic growth despite ongoing pressures from elevated prices and interest rates.

Nationally, real GDP, measured at a seasonally adjusted annual rate, increased by 2.2% in the second quarter of 2026, led by real estate and rental and leasing, information, durable goods manufacturing, and finance and insurance. The leading offsets were decreases in transportation and warehousing, retail trade, and nondurable goods manufacturing.

Regionally, real GDP increased in all eight regions between the first and the second quarters of 2026. Growth was slightly less compared to the previous quarter, with regional gains ranging from a 1.5% increase in the Rocky Mountain region to a 2.9% increase in the Mideast.

New York posted the strongest increase in real GDP during the second quarter, with growth led by the finance and insurance industry. Delaware and South Carolina tied for second, each recording a 3.5% growth rate. Minnesota and Utah followed, with each posting a 3.4% growth rate. At the other end of the spectrum, West Virginia, Wyoming, Alaska, North Dakota, Kansas, and Nebraska recorded declines in real GDP. Mining was the leading contributor to the decreases in West Virginia and Wyoming. The divergence across states highlights the importance of industry composition in shaping regional economic performance, particularly for states with greater exposure to energy and commodity-related activity.

Overall, the state GDP data show that economic growth remained broad-based in the second quarter, although the pace of growth varied significantly across regions. For the housing market, differences in state-level economic activity can have important implications for housing demand, as stronger local economies generally support household income and employment, while weaker economic conditions can weigh on housing activity.



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