Home Building Employment across States and Congressional Districts in 2023

2025-03-18T08:15:59-05:00

As the number of housing units under construction peaked in 2023, the industry set another record employing close to 11.4 million people, including self-employed workers. NAHB estimates that out of this total, 4.7 million people worked in residential construction, accounting for 2.9% of the U.S. employed civilian labor force. Home building in the Mountain Division, as well as in Vermont and Florida, stand out as generating a significantly higher share of local jobs, with residential construction generating more than 5% of all jobs in Idaho and Montana. NAHB’s analysis also identifies congressional districts where home building accounts for particularly high employment levels and share of local jobs. Not surprisingly, the most populous state—California—also has the most residential construction workers. Over 640,000 California residents worked in home building in 2023, accounting for 3.4% of the state employed labor force. Fast-growing Florida comes in second with 468,000 residential construction workers. The state stands out for registering one of the fastest growing populations since the start of the pandemic, which undoubtedly boosted housing and construction workforce demand. Florida’s large stock of vacation and seasonal housing further boosts demand for residential construction workers. As a result, in Florida, residential construction workers account for a relatively high 4.4% of the employed labor. Even though this share is well above the national average (2.9%), it is significantly lower than in 2006, when Florida registered the highest share among all 50 states and the District of Columbia, at 6.5%. Similar to Florida, fast-growing states with a high prevalence of seasonal, vacation homes top the list of states with the highest share of residential construction workers in 2023. Three states in the Mountain Division - Idaho, Montana, and Utah - take the top spots on the list with 5.5%, 5.1% and 4.9% of the employed labor force working in home building. Vermont is next on the list with a share of 4.6%.   As of 2023, the average congressional district has about 10,800 residents working in residential construction, but that number is often significantly higher. In Idaho’s 1st Congressional District, over 30,000 residents are in home building and Utah’s 2nd Congressional District has over 25,000 residents working in home building.  Eight other congressional districts have over 20,000 residents working in residential construction – Florida’s 26th, Utah’s 4th, Idaho’s 2nd, Florida’s 17th, Arizona’s 3rd, Utah’s 1st, Florida’s 28th, and California’s 29th.  By design, Congressional districts are drawn to represent roughly the same number of people. So generally, large numbers of residential construction (RC) workers translate into high shares of RC workers in their district employed labor forces.  Idaho’s 1st tops this list as well, registering the highest share of residential construction workers in the employed labor force, 6.4%. Florida’s 17th is a close second with 6.3% of the district labor force employed in home building. Next on the list are two Mountain division districts – Montana’s 1st and Utah’s 2nd – with shares of 5.8%, followed by two Florida’s districts – 19th (5.7%) and 26th (5.6%). California’s 29th (5.4%) and 39th (5.3%) also register shares far exceeding the national average of 2.9%.    At the other end of the spectrum there are several districts that contain parts of large urban areas: the District of Columbia, the 12th of New York, located in New York City, Pennsylvania’s 3rd that includes areas of the city of Philadelphia, Georgia’s 5th that includes most of Atlanta, and among others, Illinois’s 7th and 9th, covering parts of Chicago. Most residents in these urban districts tend to work in professional, scientific, and technical services. The District of Columbia stands out for having the lowest number of RC workers, with just 1,400 residing in the district. At the same time, it has a disproportionally large share of public administration workers. The 12th District of New York and the 7th District of Illinois are home to a very large group of finance and insurance workers. Meanwhile, in Pennsylvania’s 2nd, more than a third of residents work in health care and educational services.  The NAHB residential construction employment estimates include self-employed workers. Counting self-employed is particularly important in the home building industry since they traditionally make up a larger share of the labor force than in the U.S. total workforce.   The new NAHB home building employment estimates only include workers directly employed by the industry and do not count jobs created in related industries– such as design and architecture, furniture making, building materials, landscaping, etc.  As a result, the estimates underestimate the overall impact of home building on local employment.  Discover more from Eye On Housing Subscribe to get the latest posts sent to your email.

Home Building Employment across States and Congressional Districts in 20232025-03-18T08:15:59-05:00

Construction Self-Employment Stable at 23%

2025-02-18T08:17:30-06:00

The share of self-employed in construction remains just under 23%, a new post-pandemic norm. While this is significantly higher than an economy-wide average of 10% of the employed labor force, for construction, these rates are historically low. Across the nation, construction self-employment rates range from 38% in Maine to 13% in Nevada. As of 2023, close to 2.6 million of workers employed in construction are self-employed, according to the latest American Community Survey (ACS). While the industry’s payroll employment surpassed the historic highs of the home building boom of the mid-2000s, the number of self-employed remains below the peak of 2006 when over a quarter of the construction labor force was self-employed. Declining self-employment rates in construction coincide with the declining share of tradesmen in construction and potentially reflect structural changes in the construction labor force, such as a shift towards larger construction firms that are better equipped to invest into new technologies and absorb higher overhead costs. Partially, the downward trend in construction self-employment rates since the Housing Bust reflects the counter-cyclical nature of self-employment. Under normal circumstances, self-employment rates rise during an economic downturn and fall during an expansion. This presumably reflects a common practice among builders to downsize payrolls when construction activity is declining. In contrast, builders and trade contractors offer better terms for employment and attract a larger pool of laborers to be employees rather than self-employed when workflow is steady and rising.   Potentially reflecting the counter-cyclical nature of construction self-employment, the current self-employment rates are 3.4 percentage points lower compared to the peak rate of the Great Recession. For similar reasons, persistent labor shortages that plagued the industry during the last decade likely have contributed to the decline in self-employment rates. Ostensibly, to minimize construction delays, builders and trade contractors would be willing to offer better payroll terms to secure employees when finding experienced craftsmen is a challenge. Since the 2020 ACS data are not reliable due to the data collection issues experienced during the early lockdown stages of the pandemic, we can only compare the pre-pandemic 2019 and post-pandemic 2021-2022 data (hence the omitted 2020 data in the charts above). As a result, it is not clear what accounted for the post-pandemic bump in self-employment. One answer is that   self-employed workers in construction managed to remain employed during the short COVID-19 recession or recovered their jobs faster afterwards, compared to private payroll workers. Another possibility is that the booming residential construction sector attracted self-employed workers from other more vulnerable or slow recovering industries, including commercial construction. Examining cross-state variation provides additional insights into construction self-employment rates. The New England states and Montana register some of the highest self-employment shares. In Maine, 38% of construction workers are self-employed. The share is similarly high in Vermont where more than a third of workers are self-employed, 36%. In Connecticut and Rhode Island, 28% of workers are self-employed. In Montana, the share is 30%. The New England states are where it takes longer to build a house.  Because of the short construction season and longer times to complete a project, specialty trade contractors in these states have fewer workers on their payrolls. The 2022 Economic Census data show that specialty trade contractors in Vermont and Maine have some of the smallest payrolls in the nation with five workers on average. Only contractors in Montana have smaller payrolls, averaging less than 5 workers. At the same time, the national average is over nine workers. As a result, independent entrepreneurs in New England and Montana tend to complete a greater share of work, which helps explain the high self-employment shares in these states. The Mountain division has states with the highest and lowest self-employment rates simultaneously. Montana and Colorado, where more than a quarter of workers are self-employed, round up the list of states with the highest self-employment rates. At the same time, Nevada registers one of the lowest (13%) self-employment rates in construction and takes the place at the opposite end of the list. Only Washington, DC has a lower share of self-employed, 9%. The substantial differences likely reflect a predominance of home building in Montana and Colorado and a higher prevalence of commercial construction, that has larger payroll employment and, presumably, relies less heavily on self-employed. Discover more from Eye On Housing Subscribe to get the latest posts sent to your email.

Construction Self-Employment Stable at 23%2025-02-18T08:17:30-06:00

Fringe Benefits Add 18% to Home Building Payroll

2025-02-03T08:19:59-06:00

In the home building industry, fringe benefits add an additional 18% to employees’ compensation on top of payroll, according to NAHB’s analysis of the latest 2022 Economic Census data. The rates vary across residential construction sub-sectors with single-family and multifamily general contractors contributing an average of 20% on top of payroll. Fringe benefits in residential remodeling and for-sale building average 19% and 16%, respectively. Total fringe benefits consist of legally required and voluntarily provided benefits. The legally required component includes employers’ contribution to Social Security and Medicare, unemployment insurance, worker’s compensation insurance, and state-mandated temporary disability and other state-specific contributions. Since these benefits are mandatory by law, it may seem counter-intuitive to view them as “fringe” benefits. Nevertheless, the Economic Census counts them as “legally required fringe benefits” paid on top of payroll. In 2022, legally required fringe benefits contributed by single-family general contractors and remodelers amounted to an additional 13% on top of payroll. The average rate for multifamily general contractors and for-sale builders was 10% and 9%, respectively. Averaged across the four subsectors of home building, legally required benefits amounted to just under 12% of payroll. Voluntarily provided fringe benefits include expenditures paid by employers for life insurance premiums, pension plans, insurance premiums on hospital and medical plans, welfare plans, and union negotiated benefits. Other perks provided by employers, such as paid holidays, vacations, sick pay, bonuses, and jury pay, may seem like valuable “fringe” benefits but are technically counted in payroll. In 2022, voluntary fringe benefits provided by multifamily general contractors amounted to an additional 10% on top of payroll.  In the case of single-family contractors and for-sale builders, these benefits added 7% to compensation. The rate was lower for residential remodelers, where voluntary benefits amounted to 6% of payroll. Averaged across the four sub-sectors of home building, the voluntarily provided benefits approached an added cost of 7% on top of payroll. In addition to the four residential construction subsectors discussed above, the home building industry also includes land developers and specialty trade contractors (STC). Since the Economic Census does not differentiate between residential and non-residential specialty trade contractors, this combined subsector is not included in the home building chart above. Nevertheless, the latest Economic Census shows that the fringe benefit rates were highest among specialty trade contractors – 28%, equally split between legally required and voluntary. Among other things, the differences in the fringe benefit rates reflect variations in state-mandated regulations, size and legal form of companies, involvement in federally funded projects, unionization of workers, and employee participation rates in health and pension plans. For example, depending on the legal form of organization, accounting principles are different and can affect the estimated fringe benefit rates. For corporations, payroll includes compensation of executives, but for unincorporated businesses, such as individual proprietorships and partnerships, payroll excludes profit and other compensation of proprietors or partners. In addition, partners and proprietors may not be ineligible for the complete benefits package they offer to employees, also affecting the estimated fringe benefit rates for their businesses. The data used in this analysis come from the Economic Census available only every five years. The Economic Census, like many other federal statistics programs, collects data only on establishments with payroll employees. In construction, an establishment operates continually at a single physical location but typically manages more than one project or job. A large building company may operate at more than one location but would file a separate report for each location or establishment. Discover more from Eye On Housing Subscribe to get the latest posts sent to your email.

Fringe Benefits Add 18% to Home Building Payroll2025-02-03T08:19:59-06:00
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