Housing and Labor Market Resilience

Despite a chronic housing shortage, U.S. home prices continue to rise, up 1.4% year-over-year in April, though slowing down from 2.1% in March¹, signaling that demand remains solid and the market is far from recessionary stress. Some states that experienced meteoric growth early (like Sunbelt markets) are experiencing a decline in values for the first time; while other states that did not peak too fast (like Northeast and Midwest markets) continue to experience strong increases.¹  

Despite the broad demand, housing starts and single-family permits dropped 11.4% — the sharpest decline in a year² — this reflects a supply-side pullback driven by elevated mortgage rates, high construction costs³, and tariff-driven material price pressures, rather than a collapse in underlying demand. Importantly, the lack of new supply is reinforcing tight market conditions, keeping transaction markets firmly in seller’s territory and supporting apartment demand as more households get priced out of ownership. Even if broader economic growth slows, the combination of historically low inventory, resilient housing demand, and restricted new development is likely to stabilize market fundamentals, limiting downside risk and preventing the type of supply-driven correction typically seen in housing-led recessions.

The U.S. labor market remains a cornerstone of economic resilience, with ~177,000 jobs added⁴ in April, even as headlines fixate on layoffs at Meta, UPS, Morgan Stanley, and other corporate giants.⁵ Critically, history shows that headline cuts don’t always translate into macro weakness. In 2023, WARN notices (Worker Adjustment & Retraining Notification Act that requires large employers to give advance notice of mass layoffs) surged to their highest levels since 1988 (excluding COVID), yet unemployment barely moved, rising just ~50 bps, a clear sign that small business hiring remains the backbone of the labor market.

More recently, WARN activity has moderated, with only a modest uptick over the past year and a sharp drop last month demonstrated a decline in projected layoffs. The bulk of 2025 layoffs are concentrated in sectors like logistics (UPS, FedEx, Amazon, facing a post-COVID demand contraction and trade reset), food services (adjusting to large client losses), and banking/finance (hit by slower dealmaking activity and automation)—sectors whose labor shifts are relatively idiosyncratic and not indicative of weakening in macroeconomic fundamentals, but nonetheless, will negatively impact demand for warehouse, distribution, and office.⁶

1 - Zillow, United States HomeValues Index; 20a – Bloomberg, “U.S. Housing Starts Decline by Mostin a Year on One-Family Homes”

2 – Bloomberg, “U.S. Housing Starts Decline by Mostin a Year on One-Family Homes”;

3 – Wall Street Journal, “Slumping Housing Starts, BuilderEarnings Signal Soft New Home Market”

4 - Washington Post, “U.S. Economy Added Jobs in April, butSigns of Slowdown Persist”

5 – Washington Post, “April Jobs Report: Unemployment RisesSlightly as Hiring Slows”

6 – WARNTracker.com

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