Roundup: Construction hiring stalls; South has most at-risk housing markets; and more news

American builders are hitting the brakes.

The August jobs report released Friday shows that construction companies are pulling back on their staffing as global tariffs put pressure on businesses and immigration policies shrink the labor pool.

Data from the Labor Department showed that construction firms lost 7,000 jobs last month and has remained little changed since December. Residential construction lost nearly 1,000 jobs, while residential specialty contractors — think plumbers and electricians — shed 5,200.

This comes as hiring in the U.S. has stalled, with just 22,000 jobs added and the unemployment rate climbing to the highest level since 2021. The slowdown in construction underscores how many firms have canceled, deferred or scaled back projects.

“Residential starts have been rapidly slowing due to economic uncertainty and the lack of housing affordability. These conditions have led to reduced builder confidence and less hiring,” economist Richard Branch told Homes.com.

“Construction, in particular, has experienced higher costs of building materials such as softwood lumber, aluminum and steel, imports of which face tariffs and other duties of up to 50%,” said CoStar Group chief economist Christine Cooper.

Separately, the count of unfilled positions in the construction industry rose in July, according to the Bureau of Labor Statistics Job Openings Turnover Survey. The number of open construction sector jobs increased from a revised 242,000 level in June to 306,000 in July, marking a jump from a year ago level of 229,000.

Layoffs in this industry increased to 2.8% in July, the highest pace since March 2023. Meanwhile, fewer construction workers are quitting their jobs, with the number of resignations declining to 0.9% in July.

"Despite the lack of employment growth, the unemployment rate for recent construction industry workers in August was only 3.2 percent, tying the record low for August set in 2024," Ken Simonson, economist for the Associated General Contractors of America, said in a news release Friday. Simonson said the low industry rate likely is a result of workers leaving the industry to avoid being swept up in immigration enforcement actions."

When it comes to high-risk housing markets — or those plagued by housing affordability issues, foreclosures, unemployment and underwater mortgages — counties in the South dominate, according to a new ATTOM report.

Based on home prices in June, when mortgage rates remained stubbornly high, 21 of the 50 riskiest counties, the Irvine, California-based analytics firm analyzed were scattered across the South, according to its second quarter Housing Risk Report. ATTOM examined 579 counties across the country for its work, accounting for equity, foreclosures, and affordability to conduct its ranking.

The South may have dominated the list overall, but the top five riskiest counties "had unemployment rates above June’s non-seasonally adjusted national average of 4.36 percent. They also all had ratios of at least one in every 766 homes in the county in foreclosure," according to the report. The top five riskiest counties were:

1. Charlotte County, Florida
2. Humboldt County, California
3. Shasta County, California
4. Butte County, California
5. Cumberland County, New Jersey

It's worth noting that several of the California counties have been hard hit by wildfires. These states had the highest concentrations of at-risk counties:

• California (14)
• Florida (seven)
• New Jersey (five)
• Louisiana (four)

"About 1 in every 1,413 homes in the country faced a foreclosure action during the second quarter of 2025," the report found. The counties with the highest foreclosure rates were:

• Dorchester County, South Carolina (1 in every 355)
• Charlotte County, Florida (1 in every 372)
• Oswego County, New York (1 in every 427)
• Kaufman County, Texas (1 in every 467)
• Lake County, Indiana (1 in every 488)

While Southern states had the most vulnerable markets, the region also had a high concentration of counties that ATTOM deemed the least risky: 18 were in the South, the report said, and an equal amount were in the Northeast. The top 5 least risky counties were:

1. Chautauqua County, New York
2. Potter County, Texas
3. Erie County, New York
4. Madison County, Alabama
5. Olmsted County, Minnesota

Of those 50 most favorable counties, all but six had seriously underwater home rates better than the national rate of 2.7 percent, and only two of the top 50 counties had foreclosure ratios worse than the national ratio of one in every 1,413 homes facing foreclosure," the report said. The states with the most counties with the least risky markets were:

• New York (eight)
• Wisconsin (seven)
• New Hampshire (four)
• Tennessee (four)

"This summer's home prices were certainly eye-catching, but there are many factors that contribute to the health of a local housing market," Rob Barber, CEO of ATTOM, said in a press release. "Our index takes into account key indicators beyond just sales price to create a barometer that helps folks better understand where their market is headed. "There's uncertainty about how long prices can keep going up, and what will happen with the broader economy," he added. "That can be scary for owners and prospective buyers who don't always get a full view of their market."

Single-family lots are still in short supply and adding to housing market challenges, according to builders the National Association of Homebuilders surveyed.

Although the dearth of usable plots isn’t as severe as it was in 2021, 64% of the single-family builders surveyed report a shortage, Thursday’s analysis of the May Housing Market Index survey by the Washington, D.C.-based trade group and Wells Fargo.”

Of that 64%, 38% specified a low lot supply, NAHB stated, and 26% experienced a very low supply.

Despite a majority of the builders surveyed reporting some level of scarcity in May, the overall percentage was down 3% from the 67% measured in 2023 and 2024 and down dramatically from 2021’s 76% apex.

Still, “the current lot shortage seems particularly severe relative to the level of new housing production,” NAHB wrote. “Before the historic 2009-2010 trough in housing starts, the share of builders reporting a low or very low supply of lots never exceeded 53% — even in 2005 when starts topped 2.0 million. However, by 2015, when starts had partially recovered … the share of builders reporting lot shortages unexpectedly climbed to over 60%, and it has remained there stubbornly ever since.”