A Orange County Job Market That Defies High Interest Rates

by Rick Lee

Orange County is sending a strong message to economists and homeowners alike: even with high borrowing costs, the local job market remains a pillar of strength. In May 2025, the county’s unemployment rate declined to 3.6%, a full percentage point lower than California’s statewide rate of 4.9%, and also beating the national average of 4.0%.

This isn’t just a statistical anomaly. It reflects a broader trend of economic resilience in the region — one that could be highly relevant to the real estate community. When people are working, they’re spending. And when they’re confident about job security, they’re more likely to buy or invest in real estate.

Job Gains Spread Across Key Sectors

According to the California Employment Development Department, Orange County added 5,700 nonfarm jobs from April to May 2025. While the leisure and hospitality sector accounted for 2,500 of those jobs — a typical uptick in the summer — this wasn’t just a seasonal story. Multiple sectors contributed to the growth.

For instance, private education and health services continue to be among the most reliable employment drivers, especially in a post-pandemic world where demand for healthcare professionals remains high. Additionally, trade, transportation, and utilities, as well as government jobs, saw modest but consistent increases. This broader base of hiring suggests that Orange County’s employment surge isn’t merely temporary.

Meanwhile, sectors like construction and manufacturing saw slight declines of around 100 jobs each, but not enough to offset overall momentum. Even with minor sectoral adjustments, the region continues to move in a net-positive direction.

Source: Orange County Business Journal – May Employment Update

Unemployment Claims Are Falling — Another Positive Signal

It’s not just new job creation that paints a healthy picture. Statewide data reveals that the number of Californians receiving unemployment benefits dropped by over 17,000 in May, bringing the total down to approximately 384,749. Fewer people claiming benefits means more are working — and that kind of economic confidence tends to show up in the housing market.

For buyers, it means you’re competing with other financially secure households. For sellers, it may mean you’re listing in a market that, while cautious due to interest rates, still has deep demand driven by strong employment numbers.

What It Means for the Orange County Housing Market

Here’s where it gets especially important for homeowners and real estate investors: stable job growth often leads to stable housing demand. Despite the pressure of elevated mortgage rates, many buyers remain active in the market simply because their income situations have improved or remained steady.

While some argue that tourism and hospitality jobs are seasonal — and they’re right — it’s the underlying diversity of job gains that gives the current trend staying power. When multiple sectors expand at once, it indicates a more balanced and resilient economy.

That stability can help insulate the housing market from interest rate shocks. If you’ve been holding off on buying or selling due to fears of a “market crash,” the data suggests the opposite: we’re in a cooling market, not a collapsing one.

Strategic Takeaways for Buyers and Sellers in 2025

Buyers: If you have job security and financial flexibility, this may be an ideal time to get into the market — especially with less competition than in the frenzied years of 2020–2022. You might even find sellers willing to negotiate on terms, rates, or credits.

Sellers: With unemployment low and inventory still tight, your home may be more valuable than you think. Even in a higher rate environment, demand hasn’t dried up. What matters most now is pricing strategically and presenting your property professionally.

Final Thoughts: Read the Data, Not the Headlines

The Orange County housing market is influenced by far more than mortgage rates. Employment is one of the biggest long-term drivers of demand, and right now, OC is leading the way in job market performance. The key for buyers and sellers is to focus on local fundamentals, not just national narratives.

📩 If you’re wondering how this all fits into your specific strategy — whether you’re buying, selling, or investing give me a call. I’d be happy to walk you through your best options.