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September Jobs Report Highlights a Cooling but Still Growing Labor Market – Eye On Housing

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The long-delayed September jobs report revealed that the U.S. economy added 119,000 jobs while the unemployment rate climbed to its highest level in nearly four years. Combined with downward revisions to previous months, this month’s data indicates a slowing of the U.S. labor market, though one that is still expanding. With the October jobs report cancelled due to the government shutdown and November’s report not scheduled for release until December 16, this September report now stands as the Federal Reserve’s final look at labor market conditions before its December meeting.

In September, wages grew at a 3.8% pace year over year, matching August’s increase. Wage growth has been outpacing inflation for nearly two years, which typically occurs as productivity increases.

National Employment

The September jobs report was delayed by more than six weeks due to the federal government shutdown. According to the long-awaited Employment Situation Summary reported by the Bureau of Labor Statistics (BLS), total nonfarm payroll employment rose by 119,000 in September, following a downwardly revised loss of 4,000 jobs in August. August’s growth was revised down by 26,000, from an initial estimate of +22,000 to -4,000, marking the second month of negative job growth since January 2010. July’s job growth was revised down by 7,000, from +79,000 to +72,000. Combined, the revisions erased 33,000 jobs from previously reported figures.

Through September, monthly job growth in 2025 has averaged 76,000, a significant slowdown compared to the 168,000 monthly average gain for 2024.

The unemployment rate rose to 4.4% in September, its highest level in nearly four years. The number of persons unemployed rose by 219,000 and the number of persons employed increased by 251,000.

Meanwhile, the labor force participation rate—the proportion of the population either looking for a job or already holding a job—edged up by 0.1 percentage points to 62.4%. This remains below its pre-pandemic level of 63.3% recorded at the beginning of 2020. Among prime working-age individuals (aged 25 to 54), the participation rate remained steady at 83.7%, the highest level since October 2024.

In September, employment gains were seen in health care (+43,000), food services and drinking places (+37,000), and social assistance (+14,000), while the transportation and warehousing sector and the federal government experienced job losses. Federal government employment fell by 3,000 positions in September and has now shed a total of 97,000 positions since peaking in January 2025. The BLS notes that “employees on paid leave or receiving ongoing severance pay are counted as employed in the establishment survey.”

Construction Employment

Employment in the overall construction sector increased by 19,000 in September, after three consecutive months of job losses. Within the industry, residential construction added 3,100 jobs, while non-residential construction gained 16,300 positions.

Residential construction employment now stands at 3.3 million in September, including 954,000 workers employed by builders and remodelers and 2.4 million residential specialty trade contractors.

The six-month moving average of job gains for residential construction remains negative at -3,767 per month, reflecting losses in four of the past six months for May through August 2025. Over the last 12 months, residential construction has seen a net loss of 44,900 jobs, marking the fifth consecutive annual decline since September 2020. Since the low point following the Great Recession, residential construction has gained 1,340,000 positions.

In September, the unemployment rate for construction workers jumped to 5.1% on a seasonally adjusted basis. The unemployment rate for construction workers has remained at a relatively lower level, after reaching 15.3% in April 2020 due to the housing demand impact of the COVID-19 pandemic.



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

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Existing Home Sales Rise in October – Eye On Housing

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Existing home sales rose to an eight-month high in October as buyers took advantage of lower mortgage rates, according to the National Association of Realtors (NAR). Resale inventory improved from a year ago but remained below pre-pandemic levels. Relatively tight supply continued to push home prices higher and challenge housing affordability. These affordability pressures vary by region, with first-time buyers in the Northeast facing limited inventory, while buyers in the West struggle with elevated home prices.

Mortgage rates hovered between 6.5% and 7% earlier this year due to economic and tariff uncertainty. However, with the Fed resuming rate cuts in September, mortgage rates have fallen gradually. As of October 30th, the average mortgage rate decreased to 6.17%, the lowest in over a year. With additional rate cuts expected in coming months, lower mortgage rates and improved inventory should bring more buyers and sellers into the market.

Total existing home sales, including single-family homes, townhomes, condominiums, and co-ops, rose 1.2% to a seasonally adjusted annual rate of 4.10 million in October, the highest level since February. On a year-over-year basis, sales were 1.7% higher than a year ago.

The existing home inventory level was 1.52 million units in October, down 0.7% from September but up 10.9% from a year ago. At the current sales rate, October unsold inventory sits at a 4.4-months’ supply, down from 4.5-months in September but up from 4.1-months in October 2024. Inventory between 4.5 to 6 months’ supply is generally considered a balanced market.

Homes stayed on the market for a median of 34 days in October, up from 33 days last month and 29 days in October 2024.

The first-time buyer share was 32% in October, up from 30% in September and 27% from a year ago.

The October all-cash sales share was 29% of transactions, down from 30% in September but up from 27% a year ago. All-cash buyers are less affected by changes in interest rates.

The October median sales price of all existing homes was $415,200, up 2.1% from last year. This marks the 28th consecutive month of year-over-year increases. The median condominium/co-op price in October was up 0.9% from a year ago at $363,700.  Recent gains for home inventory will put downward pressure on resale home prices in most markets in 2025.

Existing home sales in October were mixed across the four major regions. Sales rose in the Midwest (5.3%) and South (0.5%), fell in the West (-1.3%), and remained unchanged in the Northeast. On a year-over-year basis, sales were up in the Northeast (4.3%), South (2.8%) and Midwest (2.1%), while down in the West (-2.6%).

The Pending Home Sales Index (PHSI) is a forward-looking indicator based on signed contracts. The PHSI remained unchanged at 74.8 in September, suggesting job market concerns kept buyers on the sideline despite mortgage rates near one-year lows. On a year-over-year basis, pending sales were 0.9% lower than a year ago, according to the National Association of Realtors’ data.



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

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Young Adults Are Once Again Moving Back Home – Eye On Housing

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Affordability Impacts: Young Adults Are Once Again Moving Back Home – Eye On Housing

The share of young adults living with parents increased in 2024, interrupting the post-pandemic trend of moving out of parental homes. Nearly a third (32.5%) of adults ages 18-34 lived with their parents according to the latest 2024 American Community Survey (ACS). This is up from 31.8% in 2023, although it remains below the pre-pandemic peak of 34.5% in 2017. Geospatial analysis of the 2024 ACS data shows significant differences across states, with the Southern and Northeastern states having some of the highest shares of young adults living in parental homes.

While the national average share increased to 31.8%, over 40% of young adults ages 18-34 lived in parental homes in New Jersey (44%) and Connecticut (41%). California and Maryland register the nation’s third and fourth-highest shares of 39% and 38%, respectively. At the opposite end of the spectrum are states with less than a fifth of young adults living with parents. The fast-growing North Dakota records the nation’s lowest share of 12%, while the neighboring South Dakota registers 18%. In the District of Columbia, where the job market was relatively stable in 2024, less than 13% of young adults lived with their parents. The cluster of north-central U.S. states completes the nation’s list with the lowest percentages of young adults remaining in parental homes.

The elevated shares of young adults living with parents in high-cost coastal areas underscore the role of housing affordability in driving this trend. Statistical analysis confirms a clear link between prohibitively expensive housing, especially rentals, and the high prevalence of young adults residing with their parents. The states with higher shares of renters paying 30 percent or more of their income on housing, and therefore considered cost-burdened, tend to register higher shares of young adults living with parents.

The reported shares come from the ACS Summary files that do not separate college-age adults (ages 18-24) from the older subset (ages 25-34). Once the ACS public microdata becomes available, it will be worth understanding whether the younger and older subgroups experienced divergent trends over the last year.



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

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How Place and Neighborhood Shape Home Values – Eye On Housing

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The value of a single-family home depends not only on its physical features but also on its location and neighborhood context. In this second part of our two-part series, we examine how geography and neighborhood quality further influence single-family detached home values across the United States. Not surprisingly, location remains one of the strongest drivers of home values (Figure 2). Homes in a big metropolitan area are valued 60% higher than comparable homes in non-metro areas, while those in smaller or midsized metro areas are 22% more.

Home values also vary significantly across Census Divisions. Using New England as the baseline, homes in the Pacific Divisions, including Alaska, California, Hawaii, Oregon, and Washington, are valued around 35% higher values on average. By contrast, homes in the rest of the divisions show substantially lower values relative to New England. Homes in the East South Central and West South Central divisions are more than 60% lower in value, while those in the Middle Atlantic are about 30% lower. In the East North Central and West North Central Divisions, home values are roughly 47% and 46% lower, respectively. Homes in the South Atlantic are 39% lower, and those in the Mountain Division are about 19% lower.

People are willing to pay a premium for a better neighborhood. This analysis shows that a higher overall neighborhood quality rating, measured on a 1 to 10 scale, contributes about a 2% increase in home value for every 1-point rise (Figure 3). For example, moving from a neighborhood rated 5 to one rated 7 could increase your home value by 4%.

On the other end, the impact of specific negative conditions is substantial (Figure 4). Homes located near abandoned or vandalized buildings have 17% lower values. Additionally, the presence of visible trash nearby reduces home values by 8%. Improving the broader neighborhood environment could have as much impact on the final home value as upgrades inside the home.

Please click here to be redirected to the full special study.



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

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Builder Sentiment Relatively Flat in November as Market Headwinds Persist – Eye On Housing

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Market uncertainty exacerbated by the government shutdown along with economic uncertainty stemming from tariffs and rising construction costs kept builder confidence firmly in negative territory in November.

Builder confidence in the market for newly built single-family homes rose one point to 38 in November, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI).

While lower mortgage rates are a positive development for affordability conditions, many buyers remain hesitant because of the recent record-long government shutdown and concerns over job security and inflation. We continue to see demand-side weakness as a softening labor market and stretched consumer finances are contributing to a difficult sales environment. After a decline for single-family housing starts in 2025, NAHB is forecasting a slight gain in 2026 as builders continue to report future sales conditions  in marginally positive territory.

In a further sign of ongoing challenges for the housing market, the latest HMI survey also revealed that 41% of builders reported cutting prices in November, a record high in the post-Covid period and the first time this measure has passed 40%. Meanwhile, the average price reduction was 6% in November, the same rate as the previous month. The use of sales incentives was 65% in November, tying the share in September and October.

Derived from a monthly survey that NAHB has been conducting for more than 40 years, the NAHB/Wells Fargo HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.

The HMI index gauging current sales conditions increased two points to 41, the index measuring future sales fell three points to 51 and the gauge charting traffic of prospective buyers posted a one-point gain to 26.

Looking at the three-month moving averages for regional HMI scores, the Northeast rose two points to 48, the Midwest fell one point to 41, the South increased three points to 34 and the West gained two points to 30. HMI tables can be found at nahb.org/hmi.



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

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August Private Residential Construction Spending Edges Higer  – Eye On Housing

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Private residential construction spending inched up 0.8% in August, continuing steady growth since June 2025. This modest increase was primarily driven by more spending on multifamily construction and home improvements. However, total spending was 2% lower than a year ago, as the housing sector continues to navigate the economic uncertainty stemming from ongoing tariff concerns and elevated mortgage rates. 

According to the latest U.S. Census construction spending data, single-family construction spending slipped 0.4% in August, in line with the soft builder sentiment reflected in the August NAHB/Wells Fargo Housing Market Index (HMI). Compared to a year ago, single-family construction spending decreased by 1.1%. Improvement spending (remodeling) posted a solid 8.2% gain for the month, but it remained 1.3% lower than in August 2024. The remodeling sector continues to show resilience, supported by strong homeowner equity and persistent demand for home improvements. Meanwhile, multifamily construction spending rose 0.2% in August, marking a pause in the downward trend that began in mid-2023. Compared to a year earlier, multifamily spending was down 7.1%.  

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 under the pressure of elevated interest rates and concerns over building material tariffs. Multifamily construction spending growth has also slowed down after the peak in July 2023. Improvement spending has also been weakening since the beginning of 2025. 

Spending on private nonresidential construction was down 4% over a year ago. The annual private nonresidential spending decrease was primarily driven by a $20 billion drop in manufacturing construction spending, followed by a $11 billion decrease in commercial construction spending.



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

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What Home Features Add the Most Value? – Eye On Housing

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The value of a single-family home is shaped by many factors, but its physical features remain among one of the most influential. Using the latest 2023 American Housing Survey (AHS), this study focuses on which home features genuinely boost single-family detached home values and by how much. Key findings show that the overall square footage of the home and the number of bathrooms stand out as especially strong value drivers, while other features such as the number of bedrooms and the presence of amenities also play a role.

In this first part of our two-part blog series, we focus on the physical features of single-family homes. The second part will explore how location and neighborhood quality further influence home values across the United States.

Home size is one of the strongest value drivers in today’s housing market, as shown in Figure 1. Compared with smaller homes under 1,000 sq. ft., homes between 1,000 and 2,000 sq. ft. are valued about 17% higher. Moving up to homes between 2,000-3,000 sq. ft. increases value by around 30%, while homes with 3,000 sq. ft. or more adds 55% more to the market value.  These effects are measured after accounting for differences in region, age of structure, and other key features.

While both the number of bathrooms and bedrooms contribute to single-family home values, the number of bathrooms has a larger impact. Each additional full bathroom increases home value by approximately 32%, compared to about 5% for an additional bedroom, holding the square footage and other features constant. Even a half bathroom brings meaningful returns, adding an estimated 15%.

The age of the home is also a contributing factor to the final market value, even after accounting for other features and neighborhood conditions. Compared to homes built before 2010, homes built between 2010 and 2019 have 13% higher values, and homes built after 2020 are valued 19% higher. These premiums likely reflect improvements in energy efficiency, insulation, and modern building systems that are appealing to more buyers.

Other amenities also bring solid returns, like garages, fireplaces, and centralized air conditioning. Garages add around 10% to home value; Besides a protected parking space, garages offer the flexibility for additional storage or turning it into a workshop/hobby space.  Having a fireplace can add value to a home, increasing its value by around 10%. It is appealing to some home buyers, as it not only provides a cozy ambiance, but also could reduce heating costs in some regions. Centralized AC adds about 7% to home value nationwide, but its impact varies across the divisions. In the South, including the South Atlantic, East South Central, and West South divisions, centralized AC adds 23%, 40%, and 48% more values, respectively.

Please click here to be redirected to the full special study.



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

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Credit Conditions for Builders Continue to Be Tight – Eye On Housing

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Credit conditions on loans for residential Land Acquisition, Development & Construction (AD&C) were still tightening in the third quarter of 2025, according to NAHB’s quarterly survey on AD&C Financing.  The net easing index derived from the survey posted a reading of -11.0 (the negative number indicating that credit tightened since the previous quarter). This is in reasonably close agreement with the third quarter reading of -6.6 for the similar net easing index produced from the Federal Reserve’s survey of senior loan officers—marking fifteen consecutive quarters of tightening credit conditions reported by both builders and lenders.

More details from the Fed’s survey of lenders—including measures of demand and net easing for residential mortgages—appeared in a previous post.

According to the NAHB survey, the most common way lenders tightened in the third quarter was by lowering the maximum allowable loan-to-value or loan-to-cost ratio on the loans (cited by 60% of the builders and developers who reported tighter credit). Tied for second place were reducing the amount they are willing to lend, requiring out-of-pocket payment of interest or borrower funding of an interest reserve, and  requiring personal guarantees (cited by 47% each).

Results on the cost of credit in the third quarter were mixed. The average contract rate increased from 7.82% to 7.95% on loans specifically for residential land acquisition—but declined on the other three categories of loans tracked in NAHB’s AD&C survey: from 8.04% to 7.68% on loans for land development, from 8.17% to 7.90% on loans for speculative single-family construction, and from 7.95% to 7.90% on loans for pre-sold single-family construction.   

Meanwhile, the average initial points charged on the loans increased across the board: from 0.56% to 0.66% on loans for land acquisition, from 0.74% to 0.83% on loans for land development, from 0.72% to 0.74% on loans for speculative single-family construction, and from 0.58% to 0.67% on loans for pre-sold single-family construction.

Those combinations of quarter-to-quarter changes caused the effective interest rate (which takes both the contract rate and initial points into account) to increase from 9.95% to 10.15% on loans for land acquisition, but to decline from 11.77% to 10.92% on loans for land development and from 12.82% to 12.04% on loans for speculative single-family construction. The average effective rate on loans for pre-sold single-family construction remained essentially unchanged at 12.74%, compared to 12.73% in the second quarter.

Although results on the average effective interest rate were mixed on a quarter-to-quarter basis, the  rate on each of the four types of AD&C loans has declined significantly since peaking somewhere in the period between 2023 Q3 and 2024 Q2.

Also in the NAHB AD&C survey, 37% of respondents who built single-family homes during the third quarter of 2025 reported financing some of the construction with a construction-to-permanent (one-time-close) loan made to the ultimate home buyer. On average, 63% of the homes these respondents built were financed this way.

More detail on credit conditions for residential builders and developers is available on NAHB’s AD&C Financing Survey web page.



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Unchanged Lending Conditions for Residential Mortgages in Third Quarter – Eye On Housing

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Lending standards for most types of residential mortgages were essentially unchanged, according to the recent release of the Senior Loan Officer Opinion Survey (SLOOS). For commercial real estate (CRE) loans, lending standards for construction & development were modestly tighter, while multifamily was essentially unchanged.  Demand for both CRE categories was essentially unchanged for the quarter. 

Two weeks ago, the Federal Reserve eased its key short-term interest rate (i.e., Federal Funds) by 25 basis points for the second consecutive meeting, establishing an upper bound of 4.00%.  While the causal link between the Federal Funds rate and the 30-year fixed rate mortgage is minimal, these cuts will have a more tangible impact for private home builders through lower rates on acquisition, development, & construction (AD&C) loans.  Roughly 60% of single-family starts are built by private builders. With pressure from both sides of their dual mandate as the job market cools and inflation remains sticky, NAHB is forecasting a measured approach from the Fed when it comes to further rate cuts next year.

Residential Mortgages

In the third quarter of 2025, four of seven residential mortgage loan categories saw a positive net easing index for lending conditions with an additional two recording a neutral reading (i.e., 0).  Only subprime loans experienced tighter lending conditions, as evidenced by a negative value (-6.3).  Nevertheless, based on the Federal Reserve classification of any reading between -5.0 and +5.0 as “essentially unchanged,” all but subprime fell within this range.

Five of the seven residential mortgage loan categories reported stronger demand in the third quarter of 2025, with the strongest demand coming from Government, GSE-eligible, and Qualified Mortgage (QM) non-jumbo, non-GSE eligible loans.  Non-QM jumbo was essentially unchanged for the quarter, while subprime loans were the only category to experience weaker demand, which has been the case since Q3 of 2020.

Commercial Real Estate (CRE) Loans

For the CRE loan categories, construction & development loans registered a net easing index of -6.6 for the third quarter of 2025, indicating modestly tighter credit conditions.  For multifamily loans, the net easing index was -1.6, or essentially unchanged.  Both categories of CRE loans show tightening of lending conditions (i.e., net easing indexes below zero) since Q2 2022.  However, the tightening has become less defined recently for multifamily, with its net easing index essentially unchanged (i.e., between -5.0 and +5.0) for four consecutive quarters.

The net percentage of banks reporting stronger demand was -4.9% for construction & development loans, with a negative number indicating weaker demand.  For multifamily, demand was neutral (i.e., 0) in the third quarter of 2025, with the same number of banks that reported weaker demand as those who reported stronger demand.  However, demand for CRE loans within both categories has experienced unchanged conditions (i.e., between -5.0% and +5.0%).



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

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Adjustable-Rate Mortgage Applications Rise  – Eye On Housing

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All types of mortgage activity rose on a year-over-year basis in October, supported by recent declines in interest rates. Notably, adjustable-rate mortgage (ARM) applications more than doubled from a year ago, and refinancing activity continued to strengthen. 

The Mortgage Bankers Association’s (MBA) Market Composite Index, a measure of total mortgage application volume, fell 7.7% from September on a seasonally adjusted basis but was 39.0% higher than a year ago. 

The average contract interest rate for 30-year fixed mortgages fell 5.4 basis points to 6.37%, the lowest in over a year. Following a strong increase in September, refinancing activity in October dropped 10% month over month, while purchase applications decreased 4.8%. Compared to a year ago, purchase and refinance applications were up 18.1% and 63.0%, respectively. 

By loan type, fixed-rate mortgage applications decreased 7% from September but were 34% higher year-over-year. Adjustable-rate mortgage applications dropped 13% month-over-month, yet surged 116.5% from a year earlier, following a 124% annual gain in September. As a result, ARMs accounted for 9.44% of total applications in October, one of the highest shares in the past three years. 

The average loan size across all mortgages was $408,000, down 3% from the previous month. The average purchase loan size remained steady at $437,000, while the average refinance loan size declined 6% to $385,000. For adjustable-rate mortgages, the average loan size fell 5% to $938,000, compared to a 2% decline for fixed-rate mortgages to $353,000. 



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