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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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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.



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Market Share for Modular and Other Non-Site Built Housing in 2024

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The total market share of non-site built single-family homes (modular and panelized) was just 3% of single-family homes in 2024, according to completion data from the Census Bureau Survey of Construction data and NAHB analysis. This is the same as the 3% share in 2023. This share has been steadily declining since the early-2000s despite the high-level of interest for non-site built construction. This low market share in fact runs counter to some media commentary on off-site construction suggesting recent gains. Nonetheless, there exists potential for market share gains in the years ahead due to the need to increase productivity in the residential construction sector.

In 2024, there were 28,000 total single-family units built using modular (13,000) and panelized/pre-cut (15,000) construction methods, out of a total of 1,019,000 single-family homes completed. It is worth noting that the Census definitions of off-site construction are relatively narrow. In a separate survey, the Home Innovation Research Labs Survey of U.S. Home Builders has a higher share for panelized construction (5-12%) due to a wider definition of “panelized” construction.

While the Census-measured market share is small, there exists potential for expansion. This 3% market share for 2024 represents a decline from years prior to the Great Recession. In 1998, 7% of single-family completions were modular (4%) or panelized (3%). This marked the largest share for the 1992-2024 period.

One notable regional concentration is found in the Midwest and the Northeast. These two regions have the highest market share of homes built using non-site build methods. In the Midwest, 7% (8,000 homes) of the region’s 136,000 housing units were completed using these methods. In the Northeast, 5% (3,000 homes) of the region’s 66,000 housing units were completed using non-site build methods. However, numerically, the South continues to be the biggest market for this type of construction where 13,000 homes were built using non-site build methods.

With respect to multifamily construction, approximately 3% of multifamily buildings (properties, not units) were built using modular and panelized methods. This is significantly lower than the 7% share in 2023 but on par with the average for the last 5 years. It is notable that modular construction method accounted for 2% of this share. In previous years it was only panelized construction methods that made up the higher share of non-site build methods in multifamily construction. Prior to last year, the highest levels of modular and panelized methods share in multifamily construction was in 2000 and 2011, where 5% of multifamily buildings were constructed with modular (1%) or panelized construction methods (4%).

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Market Flip: Existing Homes Outprice New Homes

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In the second quarter of 2025, the median price for a new single-family home was $410,800, which was $18,600 lower than the median price of existing homes, which stood at $429,400. This marks the largest historical gap where existing home prices exceeded those of new homes, according to U.S. Census Bureau and National Association of Realtors data (not seasonally adjusted – NSA) 

Typically, new homes carry a price premium over existing homes. From 2010 to 2019, this pattern held steady, with an average difference of $66,000. However, over the past five years, the gap has narrowed significantly, averaging just $24,800. Notably, this trend reversed in 2024. In both the second and third quarters, the median price of existing homes surpassed that of new homes. 

Both new and existing homes saw dramatic increases in prices post-pandemic due to higher construction costs and limited supply. While overall home prices remain elevated compared to historical norms, new homes prices have moderated due to tactical builder business decisions, whereas existing homes prices continue to increase because of lean supply and perhaps a lack of price discovery for existing homeowners. 

Indeed, the median price for a new single-family home sold in the second quarter of 2025 decreased 0.9% from the previous year. New home prices have continued to experience year-over-year declines for nine consecutive quarters.  

Meanwhile, the median price for existing single-family homes increased 1.7% from one year ago. Existing home prices have continued to experience year-over-year increases for eight consecutive quarters. 

There are several factors as to why new and existing homes are selling at similar price points. Tight inventory continues to push up prices for existing homes, as many homeowners who secured low mortgage rates during the pandemic are hesitant to sell due to current high interest rates.  

Meanwhile, new home pricing is more volatile – prices change due to the types and locations of homes being built. Despite various challenges facing the industry, home builders are adapting to affordability challenges by building on smaller lots, constructing smaller homes, and offering incentives. Additionally, there has been a shift in home building toward the South, associated with less expensive homes because of policy effects.  

Moreover, the least expensive region for new homes in the first quarter was the South, with a median price of $372,100. The Midwest followed closely behind at $385,300. For existing homes, the Midwest was the most affordably region at $328,800, followed by the South at $376,300. 

New homes were most expensive in the Northeast with a median price of $796,700, while the West sold at $531,100. For existing homes, the West led as the most expensive region at $646,100 homes, followed by Northeast at $646,100.  

The new home price premium was most pronounced in the Northeast, where new homes sold for $269,500 more than existing homes. The West and South followed the national trend, with existing homes priced $4,200 more than new homes in the West and $115,000 more in the South. 

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Market Share of 5,000+ Square Foot New Homes Started Declines in 2024

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In 2024, there were 24,000 homes that exceeded 5,000 square feet, equating to a 2.3% market share of all new homes started. Both the number and market share for 5,000+ square foot homes experienced declines from 2023, according to the annual data from the Census Bureau’s Survey of Construction (SOC).

The number of homes started in 2024 exceeding 5,000 square feet dropped to 24,000, a decrease from 26,000 in 2023. In 2006, the number of new 5,000+ square foot homes reached a peak of 45,000. This number proceeded to drop during the Great Recession and hit a low of 11,000 in 2009. Since 2013, the number has remained consistently above 20,000, with a recent peak of 33,000 in 2021.

Of the total number of new homes started in 2024, 2.3% had 5,000+ square feet or more of finished space, down from 2.8% in 2023.  The decline marks the third consecutive drop in the share of homes this size, down from a recent peak of 2.9% in 2021.  In 2015, the 5,000+ square foot share reached a record high of 3.9%.  Since then, it has fluctuated between 2.3% and 3.1%.

Tabulating the major characteristics of 5,000+ square foot homes started in 2024, the data show 83% have a porch, 79% have a finished basement, 71% have a patio, 69% have four or more bathrooms, 66% have a 3-or-more car garage, 54% have five bedrooms or more, and 50% belong to a community association.

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Top 10 Builder Market Share Across Metros

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An earlier post described how the top 10 builders in the country captured a record 44.7% of new single-family closings in 2024. BUILDER Magazine has now released additional data on the top ten builders within each of the 50 largest new home markets in the U.S., ranked by single-family permits. It is important to note that this post does not focus on the top ten largest home builders nationally; instead, it analyzes the top ten list within each of the largest 50 new housing markets.

The 2024 data show that the top 10 builder concentration in the 50 largest markets ranged from 38.9% in Kansas City, MO-KS to 97.8% in Cincinnati, OH. In 11 metro areas, the top ten builders’ market share exceeded 90%. Across all 50 metro areas, the average market share of the top 10 builders was 79.3%, up from 78.2% in 2023.  

Looking at the results on a map reveals that southern California, South Carolina, Florida, and parts of the Midwest include multiple highly concentrated markets, while Texas and the Northwest include markets with lower levels of concentration (figure 1).

Lennar and D.R. Horton each made the top ten builder list in 46 markets, the most among all builders. PulteGroup was next with 36 metro markets, followed by NVR and Meritage Homes with 22 and 20 metro markets, respectively.

From 2023 to 2024, 27 metro areas saw an increase in their top 10 builders’ market share, compared with 36 increases from 2022 to 2023. Seven metro areas experienced a double-digit increase in 2024:

Oklahoma City, OK (+20.7 percentage points, 82.8%)

Atlanta-Sandy Springs-Alpharetta, GA (+14.7 percentage points, 76.8%)

Punta Gorda, FL (+11.5 percentage points, 85.9%)

Philadelphia-Camden-Wilmington, PA-NJ-DE-MD (+10.7 percentage points, 87.5%)

Greenville-Anderson, SC (+10.6 percentage points, 89.3%)

Salt Lake City, UT (+10.5 percentage points, 69.8%)

Charleston-North Charleston, SC (+10.4 percentage points, 92.3%)

Meanwhile, 20 metro areas saw a decline in their top 10 builders’ market share from 2023 to 2024, up from only 9 decreases from 2022 to 2023. The largest decreases were seen in:

Miami-Fort Lauderdale-Pompano Beach, FL (-18.1 percentage points, 72.4%)

Los Angeles-Long Beach-Anaheim, CA (-14.7 percentage points, 75.6%)

Orlando-Kissimmee-Sanford, FL (-11.6 percentage points, 76.8%)

Tucson, AZ (-10.4 percentage points, 82.4%

Of the remaining three largest markets, Cape Coral-Fort Myers, FL saw no change in its top ten builder concentration (96.2%) from 2023 to 2024, while Fresno, CA and Spartanburg, SC are new to the top 50 market list in 2024.

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Remodeling Market Sentiment Dips in Second Quarter

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In the second quarter of 2025, the NAHB/Westlake Royal Remodeling Market Index (RMI) posted a reading of 59, down four points compared to the previous quarter. While this reading is still in positive territory, some remodelers, especially in the West, are seeing a slowing of activity in their markets. The second-quarter reading of 59 marks only the second time the RMI has dipped below 60 since the survey was revised in the first quarter of 2020.

Higher interest rates and general economic uncertainty have affected consumer confidence and are headwinds for remodeling, but not to the extent that they have been for single-family construction, as is evident in June’s negative reading from the NAHB/Wells Fargo Housing Marketing Index (HMI).  As a result, NAHB is still forecasting solid gains for remodeling spending in 2025, followed by more modest, but still positive, growth in 2026. 

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 subcomponents: 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 second quarter of 2025, the Current Conditions Index averaged 66, down five points from the previous quarter.  All three components decreased quarter-over-quarter, with both small and moderately-sized remodeling projects falling six points to 70 and 66, respectively, while large remodeling projects slipped two points to 62.  Nevertheless, all three components remained above 50 in positive territory.

Future Indicators

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

In the second quarter of 2025, the Future Indicators Index averaged 51, decreasing four points from the previous quarter. While the component measuring the current rate at which leads and inquiries are coming in remained unchanged at 51, the component measuring the backlog of remodeling jobs fell six points to 52.  Similar to the Current Conditions components, both remain above 50 in positive territory.

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.

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Residential Building Worker Wage Growth Slows Amid Softer Labor Market

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Wage growth for residential building workers continued to slow in March 2025, reflecting softening in the construction labor market, according to the latest report from the U.S. Bureau of Labor Statistics (BLS).

On a nominal basis, average hourly earnings (AHE) for residential building workers reached $38.76 in March 2025, up 4.5% from $37.10 a year ago. This marks a continued deceleration in the year-over-year wage growth, which peaked at 9.3% in June 2024. The recent slowdown reflects an easing of pandemic-related labor shortages and a softening labor demand in the construction sector. In March, the construction labor market saw a decline in job openings as employers slowed hiring plans amid ongoing economic uncertainty.

Despite the slowdown in wage growth, residential building workers’ wages remain competitive:

10.2% higher than the manufacturing sector ($35.17/hour)

24.0% higher than the transportation and warehousing sector ($31.25/hour)

3.7% lower than the mining and logging sector ($40.23/hour)

Note:

Data used in this post relate to all employees in the residential building industry. This group includes both new single-family housing construction (excluding for-sale builders) and residential remodelers but does not include specialty trade contractors.

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Remodeling Market Sentiment Down in First Quarter

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Sentiment declined among remodelers in the first quarter of 2025, following a similar trend last month in single-family home builder sentiment. The NAHB/Westlake Royal Remodeling Market Index (RMI) posted a reading of 63 in the first quarter, down five points compared to the previous quarter. While this reading is still in positive territory, this is only the second time since the first quarter of 2020 that the RMI has been as low as 63.

Tariffs and economic uncertainty were top-of-mind for consumers this quarter. Although almost all the data for the first quarter RMI were collected before the release of specific reciprocal tariffs, the debate and uncertainty over tariffs has had an effect on consumer confidence.   Moreover, remodelers responding to the special questions as part of the RMI survey reported that their suppliers have already increased prices by an average of 6.9% since January 20, due to the anticipated effect of tariffs. 

Nevertheless, strong tailwind factors, such as an aging population, aging housing stock, home equity gains post-COVID, and “locked-in” (definition) existing homeowners, will continue to keep remodeling spending solid for the foreseeable future according to NAHB’s forecast.  

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 subcomponents: 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 first quarter of 2025, the Current Conditions Index averaged 71, dropping four points from the previous quarter.  While the component measuring small-sized projects remained unchanged at 76, moderately-sized remodeling projects inched down one point to 72 and large remodeling projects fell 11 points to 64. However, all three components remained above 50 in positive territory.

Future Indicators

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

In the first quarter of 2025, the Future Indicators Index averaged 55, down six points from the previous quarter. Both subcomponents experienced decreases quarter-over-quarter, with the component measuring the backlog of remodeling jobs inched down one point to 58 and the component measuring the current rate at which leads and inquiries are coming in fell 11 points to 51.

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.

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Home Professionals Bracing for Impact of Market Shifts

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The quarterly U.S. Houzz Renovation Barometer asks more than 1,000 construction and architecture and design firms on Houzz about their expected, current and recent business activity. The just-released Q2 2025 Barometer, fielded March 14-28, was expanded to include questions about how professionals expect market shifts, such as tariffs and interest rates, to impact their business and the industry as a whole.

The report found that firms across the industry expect these shifts to negatively impact their business. Additionally, many are adjusting procurement strategies and selectively stockpiling materials in anticipation of tariff-driven price hikes, especially on lumber, steel and cabinetry.

Here are more insights into construction and design businesses’ outlooks and strategies in the face of changing economic conditions.



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