Unemployment insurance claims provide valuable insights into the overall health of the economy, as they are one of the timeliest indicators of the U.S. labor market. Since the real estate market is closely tied to the broader economy, understanding unemployment trends can help us predict housing demand and whether homebuyers are feeling confident entering the market.

NAR has been tracking the number of initial unemployment claims, which refer to the number of new jobless claims filed by U.S. workers seeking unemployment compensation. Initial claims provide total and state-level estimates on a weekly basis. Therefore, the data are a good proxy for new layoffs, showing early signs of changes in the economic cycle.

In the week ending July 5: 

  • The actual number of total initial claims was 240,802, an increase of 4.3% from the previous week.
  • In the comparable week in 2024, there was a total of 242,191 initial claims.
  • Compared to the previous week, initial claims fell in 26 states and the District of Columbia, with New Hampshire (-48.8%), Vermont (-42.7%), and Wyoming (-32.9%) experiencing the most notable decreases.
  • The states with the highest increases in claims were North Dakota (252.8%), Michigan (129.7%), and Tennessee (97.2%).
  • In Maryland and Virginia, although the 4-week average of initial claims revealed a trend of improvement, claims increased slightly by 5.8% in Virginia and decreased by 28.9% in Maryland.
  • In the District of Columbia, claims increased by 22.6% between June 28 and July 5, ranking ninth among all state-equivalents in terms of the highest increases in claims.
     

Another indicator of unemployment trends is the number of continued claims, which tracks the number of individuals who are continuing to receive unemployment benefits after their initial claims. Unlike initial claims, this data is an indicator of permanent unemployment. In the week ending June 28, continued claims increased by almost 6% compared to one year ago, while initial claims decreased by nearly 3%.

From an economic perspective, the labor market remains robust, with 147,000 new jobs added in June, consistent with the average monthly gain of 146,000 over the last 12 months. Additionally, the unemployment rate changed insignificantly from 4.2% in May to 4.1% in June, remaining in the range of 4.0%-4.2% since May of last year. However, it’s important to remember that jobs data is a lagging indicator, reflecting changes after economic shifts have already taken place. While the unemployment rate decreased last month, we could still see the effects of elevated continued claims in the next release of the nation’s employment situation.

To view changes in unemployment benefit claims in your market, select a state on the map below: