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- Homebuilder layoffs rise—especially in Texas and Florida—as pricing power slips
Homebuilder layoffs rise—especially in Texas and Florida—as pricing power slips
Residential building construction employment is down 3,800 jobs (-0.4%) from its cycle high, while residential contractors are down 44,000 jobs (-1.8%). That’s not a big pullback, but it does mark softening.
Lance Lambert
September 06, 2025
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As unsold completed new-build inventory piles up and builders see their pricing power decreased—particularly in Sun Belt markets like Austin, Tampa, and Jacksonville—more homebuilders are turning to layoffs to avoid a larger margin compression. Many builders are trimming corporate staff headcounts a little and scaling back on spec construction in areas where months of supply has gotten too high for their liking.
Look no further than a recent John Burns Research and Consulting survey, which found that 63% of U.S. homebuilders said their local peers had recently conducted layoffs, while only 14% reported no recent layoffs among peers.
The numbers were even more striking in key Sun Belt markets: 87% of Texas builders and 79% of Florida builders said their peers had recently cut workers.
By contrast, homebuilders in the Midwest and Northeast reported the lowest levels of layoff activity.
Unlike some other subsectors of residential real estate—such as mortgage lending or the agent side of the business—homebuilding employment had remained relatively resilient following the 2022 rate shock. Bigger incentives, like forward-commitment mortgage rate buydowns, helped many builders maintain sales volume and avoid a sharper pullback.
But with the housing market softening further over the past year and multifamily completions now rolling over—after a wave of projects completed that were financed during the ultra-low-rate pandemic years—more builders are cutting staff to adjust to the current environment.
According to the U.S. Bureau of Labor Statistics, residential building construction employment has fallen by 3,800 jobs (-0.4%) from its cycle high in March 2025, while residential specialty trade contractor employment is down 44,000 jobs (-1.8%) from its September 2024 peak.
So far, that’s not a big pullback—but it certainly marks a softer residential labor market.
Given the recent softening in the residential construction labor market, it’s no surprise that during the latest earnings season, homebuilders emphasized that labor availability and labor costs aren’t major concerns right now. Heading into 2025, there were fears that a sharp slowdown in undocumented immigration at the border and an uptick in deportations could quickly tighten the residential construction labor pool and drive up labor costs. So far, broader conditions in homebuilding have outweighed those concerns.
“From labor availability, it's plentiful. We have the labor that we need. Our trades are looking for work. And that's why you've seen sequential and year-over-year reduction in our cycle time. Because we have the support we need to get our homes built. And, you know, given those efficiencies, reductions in stick and brick [costs] over time. Some of that is from design. And efficiency of the product that we're putting in the field. And some of that is just from the efficiency of our operations.”
“Labor’s available. We haven’t seen any change there. We continue to be an employer of choice. We’ve got consistent, predictable work. We pay on time. We pay well and fairly. So I think we’ll continue to be a place that will attract available labor. You know, in terms of our cost assumptions, really no change from what we rolled out at the beginning of the year on the labor front.”
“We have always and continue to verify the labor that’s on our job site to be able to work legally in the country. That’s always been the case. We continue to make that a priority. You know, there certainly is, I think, disruptions within the broader labor force, not just in construction related to kind of ICE enforcement, and, you know, that’s something that I think the country is going to have to grapple with. And, you know, as that impacts the total available labor force, I don’t think it’ll be specifically just a construction challenge depending on what level of enforcement and deportation ultimately happens.”
"Labor also seems to be more available in our markets potentially stemming from slower multifamily construction and reduced starts in the industry."
Historically, residential construction employment tends to roll over before most traditional recessions (i.e., those not driven by sudden shocks like the COVID-19 downturn in 2020). As a leading indicator, combined with signs of softening in the broader labor market, it’s something to keep an eye on right now.
Hypothetically, IF the U.S. unemployment rate were to spike and the economy weakened, financial markets could respond with a flight to safety—driving up demand for Treasuries, pushing bond prices higher, and sending yields (including mortgage rates) lower. For now, however, the labor market appears to be softening rather than experiencing an outright “break.” If that changes, we’ll cover it.
In case you’re curious, below is the latest national permits data.
