States with Highest and Fastest Rising Construction Wages

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You’re not going to get rich renting out your time. You must own equity - a piece of a business - to gain your financial freedom.

― Naval Ravikant

Economic Watch: Job Growth Slows in April; Labor Market Remains Strong link

• April saw the U.S. adding only 175,000 jobs, missing the expected 240,000. This shortfall reflects a deceleration in the labor market, despite being part of a longer-term slowdown trend.

• The unemployment rate edged up slightly to 3.9%, yet average hourly earnings grew by 3.9% year-over-year. Although wage growth has decelerated, it still plays a significant role in ongoing discussions about inflation and monetary policy.

• Despite slower job growth, sectors like health care and construction showed resilience, adding 56,200 and 9,000 jobs respectively. This suggests certain industry sectors continue to expand, underpinning the labor market's overall strength.

Apartment Occupancy Ticks Up for the First Time Since Early 2022 link

• National apartment occupancy saw its first increase since February 2022, reaching 94.2% in April 2024. This marks a slight recovery of 10 basis points from the previous month across all major U.S. regions.

• Despite the occupancy gains, rent growth remains sluggish due to high supply levels. Effective asking rents rose just 0.2% month-over-month, and year-over-year growth was nearly flat at 0.1%.

• Some markets, notably Milwaukee and others in the Midwest, recorded notable rent increases, while high-supply areas like Austin faced significant rent reductions. The disparities in market performance highlight ongoing challenges in balancing supply and demand.

April 2024 Housing Market Trends Report link

• Housing inventory has shown significant growth for the sixth consecutive month. April witnessed a 30.4% increase in homes for sale compared to the same month last year, highlighting a continued trend towards more available homes. This is the highest level of active home listings seen since 2020, though still 35.9% lower than pre-pandemic levels from 2017 to 2019.

• The median list price remains stable at $430,000, but the cost of homeownership is rising. Despite no year-over-year change in median list price, the cost per square foot has increased by 3.8%. This increase, coupled with rising mortgage rates, has resulted in a 6.9% year-over-year increase in the monthly cost of financing a typical home.

• Market dynamics are pushing for quicker adjustments by sellers. There is a notable increase in the number of homes with price reductions—from 12.3% last April to 15.5% this year—as sellers react to a market that still demands affordability. This behavior reflects a shift towards pre-pandemic norms and indicates a more competitive listing environment.

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States with Highest and Fastest Rising Construction Wages, 2024 link

• Construction wages are rising sharply, with average hourly earnings up 5% from last year to nearly $38 nationally in March 2024. Massachusetts leads with wages nearing $49 per hour, while ten other states also exceed $41 per hour.

• The disparity in construction wages is stark across the U.S., with the highest wages in Northeastern and Pacific coast states, and the lowest in the South. For example, Arkansas and Mississippi report the lowest wages at around $28 per hour.

• Wage growth is uneven, with four states seeing increases above 8%. These rates far exceed the national average, indicating extremely tight labor markets in these areas, which can impact construction costs and project timelines.

Comparing 1st Quarter Rent Growth to Normal Seasonal Behavior link

• U.S. apartment rents in Q1 2024 fell below seasonal expectations, recording a 0.1% drop compared to the pre-pandemic growth of 0.6%. This shift signifies a deviation from the decade-long trend of first quarter gains.

• High supply levels are dampening rent growth, especially in Texas markets like Austin and Dallas, where new construction heavily outstrips demand. These areas have seen significant influxes of new units, challenging the balance between supply and demand.

• Some Eastern U.S. markets, particularly Virginia Beach and Washington, D.C., outperformed their historical first quarter averages. In these areas, rent growth exceeded pre-pandemic norms by up to 0.4%, showcasing their resilience amidst the broader trend.

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That's all, folks.

Cheers,

Vidit

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