High-income job losses stand to hurt housing market

National job growth is slowing, and most major U.S. metros are adding jobs at a below-normal pace, according to a new analysis from John Burns Research and Consulting.

The report compares current metro-level growth to long-term averages since 2010, and details possible ramifications for the housing market.

Charlotte posted the strongest job growth among large metros, up 2.6% year-over-year, supported by a 4.5% increase in professional services employment — one of the few high-income sectors still expanding.

Austin and Denver, by contrast, are growing far more slowly than their historic averages, as technology and professional services jobs continue to decline.

Philadelphia and New York also showed modest job gains of 1.8% and 1.7% respectively, both slightly above their long-term trends — but largely reflecting continued recovery from post-recession lows rather than sustained outperformance.

The Bay Area saw job losses of 0.4% year-over-year, driven by declines in high-income sectors despite the influence of the AI-driven tech boom, which has not meaningfully boosted employment.

Data notes that employment composition now matters as much as overall job growth in shaping local housing markets.

High-income industries such as information, professional services and financial activities are contracting across most metros.

These jobs traditionally fuel homebuying demand. Nationally, employment in those sectors was flat in August compared to a year earlier, well below the long-term annual growth rate of 1.6%.

Meanwhile, education and healthcare have become the primary sources of new jobs nationwide, growing 3.3% year-over-year in August — significantly above the long-term average of 2.1%.

The sectors’ expansion is strongest across most metros but tends to support rental housing demand more than home purchases, given their lower average wages, the report said.

For housing market participants, the report highlights several takeaways:

• Homebuilders may face a shrinking pool of qualified buyers and may need to focus on more affordable projects and alternative locations.
• Rental housing operators are expected to see continued demand from workers in education and healthcare.
• Residential building suppliers could encounter margin pressure as affordability challenges drive a shift toward smaller, cost-efficient designs.