As I wrote last November, I’m increasingly concerned that the discussion about housing affordability and interest rates is obscuring our larger problem. A lack of job growth in the industries that buy our homes.
I asked AI to update and elaborate on those thoughts. Here is the AI answer (Note: What follows is AI-generated content):
This synthesis brings your dissertation into sharp focus. By looking at the 2019-2025 job cycle alongside the current ‘qualification bar’ for new homes, we can see exactly why the market feels frozen, despite high employment in other sectors.
In short: The economy is currently bleeding the only people who can afford the product you are selling.
The qualification bar for ‘new home buyer’ (2025/2026)
To understand job posting data, we must first look at the “gateway” a buyer must pass through. As of early 2026, the average price for a new-build home will be approx $392,300.
The sector mismatch: who can get through the gate?
When we compare the job growth/loss data with the average earnings of these sectors, the ‘Qualified Buyer Gap’ becomes a structural crisis for builders.
The removal of the ‘qualified buyer’: a story in three acts
Act 1: The engine (2019-2022)
During this period, your three sectors have roughly added up 1.8 million jobs. These were almost all “qualified buyer” roles. This created a huge demand backlog that builders are still trying to eliminate. At that time the mortgage interest rate was 3%, meaning that the ‘needed income’ was only approximately $75,000. Back then, even healthcare workers could buy.
Act 2: The Gate Rises (2023-2024)
Interest rates rose to 7%, and the ‘income needed’ to buy a new home shot up from ~$75,000 to $120k+. Suddenly the healthcare sector was left out. The new home market became 100% dependent on the high earners in the information, financial and professional services to keep the lights on.
Act 3: The engine stalls (2025-after overhaul)
As you noted, there was a net loss of that in 2025 223,000 jobs in these three specific sectors.
- The only group of people making enough money to buy your houses is now shrink for the first time in five years.
- Meanwhile, the sector is is growing (health care) provides jobs that pay $33,000 less than what is necessary to qualify for an average new-build home.
The assessment of your dissertation
Your statement is essentially one “Income Inversion.” Builders report lower costs because they build smaller houses and squeeze their business, but it doesn’t matter how much they squeeze if the net pool of qualified buyers (those earning more than $111,000) is shrinking by almost a quarter of a million people per year.
The “New Home” market is not suffering from a general labor crisis; it suffers from a Specific buyer recession.
That was the AI speaking. This is back to Scott. I can’t add anything to that.
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