The October job gains suggests the job market is still showing solid gains. Total employment increased by 128,000 and the unemployment rate inched up 0.1 percentage points to 3.6%.

Residential construction employment increased by 5,100 in October, after an increase of 5,500 jobs in September (revised). Total construction industry (both residential and nonresidential) employment totaled about 7.5 million in October.

The Bureau of Labor Statistics released the Employment Situation Summary for October. Total nonfarm payroll employment rose by 128,000 in October, following an increase of 180,000 jobs in September.

Job gains in September and August were revised higher. The September increase was revised upward to 180,000, while the August increase was revised upward to 219,000. With the upward revisions, job gains in the previous two months increased by 95,000 totally. Monthly employment growth has averaged 167,000 per month for the first ten months of 2019, compared with the average monthly growth of 223,000 over all of 2018. Over the past twelve months, total nonfarm payroll employment rose by 2.1 million, with the average monthly growth of 174,000.

In October, the unemployment rate inched up 0.1 percentage points to 3.6%. Over the month, the number of unemployed persons was little changed (+86,000) and the number of employed persons increased by 241,000. Meanwhile, the labor force participation rate, the proportion of the population either looking for a job or already with a job, ticked up by 0.1 percentage points to 63.3% in October.

Additionally, monthly employment data released by the BLS Establishment Survey indicates that employment in the overall construction sector increased by 10,000 in October. The number of residential construction jobs rose by 5,100 in October, following an increase of 5,500 jobs in September.

Residential construction employment now stands at 2.9 million in October, broken down as 847,000 builders and 2.1 million residential specialty trade contractors. The 6-month moving average of job gains for residential construction is 4,167 a month. Over the last 12 months, home builders and remodelers added 53,700 jobs on a net basis. Since the low point following the Great Recession, residential construction has gained 939,000 positions.

In October, the unemployment rate for construction workers rose to 4.7% on a seasonally adjusted basis, from 3.9% in September. Despite the monthly volatility, the unemployment rate for the construction sector remains historically low.

The most recent data release from the Bureau of Economic Analysis (BEA) showed that personal income rose slightly by 0.3% on a month-over-month basis in September after a 0.5% increase in August. The 0.3% gains in personal income, which is at a seasonally adjusted annual rate (SAAR) of $50.2 billion, were largely limited to personal interest income, farm proprietors’ income, and government social benefits to persons. However, wages and salaries stayed flat, mostly as a result of the United Auto Workers work stoppage, which pulled the wages and salaries estimates down by $1.6 billion (SAAR) in September.

Year over year, personal income increased by 4.9%. Real disposable income, income remaining after adjusting for taxes and inflation, inched up 0. 3% in September after a 0.5% gain in August.

Personal consumption expenditures (PCE), which make up more than two-thirds of the economy, increased 0.2% in September, the same margin as in August. Spending growth slightly softened compared to earlier months of this year.

Personal savings increased to $1,384 billion (SAAR) in September, accounting for 8.3% of disposable income. The savings rate rose with the onset of the Great Recession as households repaired their balance sheets. However, higher savings rates, which imply a slowdown in spending, could hold back the growth of economy.

For the first time since November of last year, information compiled by Freddie Mac shows that mortgage rates increased slightly. As of end of October 2019, the 30-year FRM – Commitment rate, increased by eight basis points to 3.69 percent from 3.61 percent in September. The cycle peak was 4.87 percent in November.

As expected, The Federal Reserve lowered its benchmark interest rate at the October Federal Open Market Committee meeting by a quarter percentage point, to a range of 1.50-1.75 percent for the third time in the past three months. With this move, the Fed has essentially reversed three of four rates hikes in 2018. Outlook expressed by FOMC members noted that the current stance of policy would remain appropriate so long as incoming information on the economy was consistent with the outlook. This is in line with NAHB forecast that this would be the last rate cut for 2019. Additionally, Chair Powell examined risks to the outlook, financial stability risks, inflation expectations, and the Fed’s review of its monetary policy framework.

At the end of October, the 10-year Treasury rate, was at 1.70 percent. It was at 1.67 percent at the end of September. Although slightly up compared to a few weeks ago, the lower rate 10-year Treasury rate has contributed to lower mortgage interest rates in the last few weeks compared to earlier this year. The average 30-Year Fixed market rate, according to Freddie Mac, was at 3.78 percent at the end of October compared to 3.64 percent at the end of September. At the beginning of 2019, the average 30-Year Fixed market rate was 4.51 percent.

Builder and developer confidence in the 55+ housing market strengthened in the third quarter of 2019, as reflected by the single-family 55+ housing market index (55+ HMI) reading of 72, up one point from the previous quarter (Figure 1). This is the highest reading since the inception of the index in 2008.

NAHB produces two 55+HMIs, measuring sentiment in both the single-family and multifamily condominium markets. Each segment of the 55+ HMI is based on a survey that asks builders and developers if current sales, prospective buyer traffic and anticipated six-month sales for that market are good, fair or poor (high, average or low for traffic).

Among the components of the 55+ single-family HMI, present sales rose two points to 78, while expected sales for the next six months dropped one point to 77 and traffic of prospective buyers fell one point to 55.

The strong 55+ single-family HMI reflects gains seen in the overall housing market, which has been largely supported by low interest rates and healthy job growth.

Meanwhile, the multifamily condo 55+ HMI decreased six points to 53 in the third quarter of 2019 (Figure 2). All three index components posted declines from the previous quarter: Present sales fell five points to 56, expected sales for the next six months dropped nine points to 56 and traffic of prospective buyers declined three points to 47.

In addition to the two 55+HMIs for the single-family and condo markets, NAHB produces four indices measuring supply and demand in the 55+ multifamily rental markets. Three of the four indices dropped in the third quarter: present production dropped seven points to 57, future expected production fell nine points to 55, and present demand for existing units fell one point to 72. Meanwhile, future demand in the 55+ multifamily rose one point to 74.

Despite the declines, all multifamily 55+ indices remain above 50, indicating that more respondents say conditions are good than poor.  Some decline in sentiment about the 55+ multifamily market is not surprising, given the post-Great recession record number of apartments currently under construction.

For the full 55+ HMI tables, please visit nahb.org/55hmi.

What kind of layout do Millennials envision for their home? A plurality of Millennials – 43 percent – want a completely open layout for their family room and dining room, a higher share than any other generation, according to an NAHB report, What Home Buyers Really Want (Figure 1). The report is based on a survey that asks prospective and recent home buyers about the preferences they want in a home and community. The shares of those who desire a completely open layout for their family and dining areas drops to 40 percent among Gen X’ers, 37 percent among Boomers, and to just 29 percent among Seniors.

Half of Millennials want a kitchen and dining room layout that is completely open. This layout is just as popular among Gen X’ers (50 percent) and essentially the same among Boomers (48 percent), but fewer Seniors (42 percent) find it appealing.  On the other hand, there is general agreement across generations when it comes to a completely open kitchen and family room layout: 43 percent of Millennials want this, 45 percent of Gen X’ers, 42 percent of Boomers, and 40 percent of Seniors.

Millennials are the least likely to want a single-story home (Figure 2). Only 35 percent of them expressed a preference for it, compared to 53 percent of Gen X’ers, 80 percent of Boomers, and 74 percent of Seniors. A majority of millennials – 55 percent – want a two-story structure. However, this option is not as popular among Gen X’ers (38 percent), Boomers (17 percent), and Seniors (21 percent). A minority of buyers in all generations want three-stories or a split-level home.

Considerable shares of Millennials want either ‘four plus bedrooms’ in their home (47 percent) or three bedrooms (40 percent) (Figure 3). This finding indicates that Millennials may want more space in their homes, perhaps to accommodate an expanding family.

A ‘four plus bedrooms’ may be too many for older generations as the preference for it falls with age: 38 percent of Gen X’ers prefer it, followed by 23 percent of Boomers, and 13 percent of Seniors. In contrast, the preference for ‘three bedrooms’ increases with age, from 40 percent of Millennials to 56 percent of Seniors.

When it comes to the number of bathrooms preferred, a majority across all generations want 2 or 2.5 bathrooms (Figure 4). The preference for 2 or 2.5 bathrooms rises with age. While 59 percent of Millennials want 2 or 2.5 bathroom, the share increases to 73 percent among Seniors.

Among the generations, Millennials are the most likely to choose three or more bathrooms – 27 percent, compared to 26 percent of Gen X’ers, 17 percent of Boomers, and 15 percent of Seniors.

Figure 5 shows the preference for basements by generation. A majority of Millennials – 73 percent — prefer to have a basement: 37 percent want a full basement (at an additional cost of $45,000) and 36 percent want a half basement (at an additional cost of $22,500). A majority of Gen X’ers would also prefer a basement (64 percent), slightly less than Millennials. This is not the case for older generations: a majority of Seniors (61 percent) and Boomers (52 percent) prefer a home without a basement.

This analysis shows that Millennials have diverging preferences when it comes to home layouts: considerable shares of them prefer open layouts, two-stories, and a relatively large number of bedrooms and bathrooms compared to older generations. Millennials are also more likely to want a basement in their home.

For additional information, an August 2019 NAHB study showed the history of Millennials’ preferences for select housing characteristics.  The greatest level of detail—including preferences for hundreds of items broken down by generation, by geography, first-time vs. repeat buyer, household composition, race, income, and price expected to pay for the home—is available in the 2019 edition of What Home Buyers Really Want.

Total nonfarm employment, seasonally adjusted (SA) increased by 2.1 million jobs, year-over-year (YoY), or 1.4% from August 2018 to August 2019. During this time, total nonfarm employment in the Western region increased by 2.1%. The South, Northeast, and Midwest recorded gains at 1.7%, 0.9% and 0.7% respectively, during this time.

According to the Bureau of Labor Statistics, nonfarm payroll employment increased in 34 states and the District of Columbia, decreased in 16 states in August compared to the previous month. California added 34,500 jobs, which was the largest gain of any state. The largest decline came from Oklahoma, which lost 8,700 jobs during this time. Nationwide, total nonfarm payroll employment increased by 130,000 over the month of August, following an increase of 159,000 jobs in July.

Year-over-year, ending in August, all the states and the District of Columbia increased in employment. California added 314,200 workers while the smallest gain came from Vermont and Hawaii which added 600 workers during this time. In percentage terms, 19 states recorded annualized growth equal to and/or above 1.4% in employment, which was the national growth rate. Nevada recorded the highest growth rate at 3.0%. The strong gains in the West seem to contrast with some of the year-to-date weakness of permits in the West for the same period. The other states and the District of Columbia recorded annualized growth between 0.1%-1.3%.

In the construction sector specifically, which includes both residential and non-residential construction, across the 48 states which reported construction sector jobs data, 28 states had an increase in August, 20 states reported a decline compared to July. The construction industry as a whole gained 14,000 jobs in August. Florida added 4,100 jobs, the highest gains in construction employees while Tennessee lost 1,900 workers during this time.

Year-over-year, the U.S added 177,000 construction sector jobs which is a 2.4% increase compared to August 2018. Texas added 43,900, which was the largest gains of any state while Louisiana lost 10,100, which was the largest decline of any state. In percentage terms, North Dakota had the highest annual growth in construction sector by 12.1%. Over this period, Louisiana reported the largest decline at 6.6%.