Location Strategy Chartbook 09.05.2026

August jobs added: 162,000

• Hospitality (+59,000)

• Education (+42,000)

• Construction (+22,000)

• Manufacturing (+16,000)

  

In August, % of unemployed for more than 27 weeks came in at 27.0%, up from 25.5% in prior month

Labor force participation rate: 61.6%

Prime age labor force participation rate: 83.4%

Two-month net revisions to nonfarm payrolls added 55,000 jobs

The US-Israel war with Iran, and the continuing stalemate over the Strait of Hormuz, have helped prices surge to an average of $4.15 per gallon as of Thursday — an all-time record for September — and well above the $3.80 per gallon drivers paid on July 4, the usual peak of summer driving season. Meanwhile, diesel prices rose to a record high of $5.85 a gallon.

WSJ: Worries about a protracted conflict with Iran, swelling fiscal deficits and rate hikes are rattling global bond markets. The potential effects on the U.S. economy stretch far beyond the Treasury market.

Higher bond yields also hit the rental market, making it costlier for developers to build and pushing landlords to demand higher rents. At the same time, a housing market frozen by high mortgage costs encourages renters who would like to buy to stay put, increasing demand.

There are also broader effects. Americans buy lots of stuff to outfit new homes, like furniture and appliances, and housing turnover also spurs renovation projects. The slowdown in such activity has already hit home-improvement retailers Home Depot and Lowe’s.

Meanwhile, building-materials suppliers, such as roofing and flooring manufacturers, have struggled to make up lost business as homeowners opt to stay in their current homes.

Americans are moving less, and the slowdown is broad-based, according to BofA data. Mobility continued to decline in Q2 2026 across income groups, generations and move types, with lower-income households and Millennials seeing the sharpest pullbacks.

Bank of America account data also tells us that while longer-distance relocations have fallen more sharply overall, moves within the same city slowed at a faster rate in Q2 2026. This suggests to us that the resilience of same-city moving deteriorated
somewhat in the past quarter. When people do change locales, they still favor smaller cities, especially those in the Midwest.

Moving-related spending is gravitating toward services and online spending. However,
some homeowners are choosing renovation over relocation. Supported by home equity lines of credit (HELOC) loans, this renovation activity may broaden spending growth across home improvement retailers.

Las Vegas’ main airport is seeing a broad-based slowdown in traffic that is directly affecting its real estate market, especially hotels and retail.

Passenger volume ended 2025 just short of 55 million in Las Vegas. Though lower than the recorded figures for 2024 and 2023, the numbers from 2025 were nonetheless higher than 2022 and all other years preceding it.

This situation has been growing more concerning, however, as 2026 has marched onward with no signs of improvement. With year-over-year declines now averaging close to 8% in recent months, Las Vegas could end the year with just above 50 million passengers for 2026 if current trends continue.

Houston's Galleria-Uptown apartment market is becoming a tale of two markets. While luxury buildings continue to attract renters, many older properties are losing residents, driving vacancy to record levels.

Vacancy reached 12.2% in the third quarter of 2026, well above the submarket's long-term average. Unlike many Houston neighborhoods, however, the increase has not been driven primarily by a surge in new construction. Instead, the weakness is concentrated in older apartment complexes, particularly the large inventory of three-star properties that make up roughly 40% of the market.

Luxury four- and five-star properties have emerged as the primary source of demand, while one-and-two-star and three-star complexes have collectively recorded three consecutive years of negative absorption.

A growing number of luxury properties are also operating under Public Facility Corp., or PFC, structures. These arrangements provide property tax relief in exchange for reserving a portion of units at below-market rates. The result is that many renters can now access newer, highly amenitized apartments at prices that compete directly with older properties, intensifying competition throughout the market.

Despite accounting for much of the recent development activity, luxury properties report vacancy of just 8.5%. Vacancy has climbed to roughly 15% among both one-and-two-star and three-star properties, where landlords are relying increasingly on concessions and discounted rents to attract residents.

Galleria-Uptown retains some of Houston's strongest long-term fundamentals. Often referred to as Houston's "Second Downtown," the area benefits from a concentration of office employment, luxury retail, affluent households and proximity to neighborhoods such as River Oaks, Tanglewood and Memorial. Average rents of roughly $1,520 per month remain among the highest in Houston. Only about 450 units are under construction, with most scheduled to be completed by mid-2027.

New home listings hit their highest in 4 years