Report finds massive construction labor shortage

A report released by NHC member the Home Builders Institute (HBI) on Tuesday finds that the construction industry faces a shortfall of over 200,000 workers, threatening to push already elevated housing prices even higher. The report describes a “two-tiered” recovery in the construction industry, with significant higher demand for workers in residential construction than in the non-residential sector, meaning that cost increases due to the labor shortage will likely impact residential properties more than commercial ones.
The report notes that the shortage is especially high considering the current housing boom: more than 60% of builders currently report issues finding workers, while that number never exceeded 45% during the comparable housing boom of 2005. While labor costs typically represent about a third of the cost of a new home, “that share of the costs is rising, due to the shortage of available labor,” said HBI President and CEO Ed Brady in a statement announcing the report. “This persistent challenge endangers the affordability and availability of housing and hinders a robust economic recovery.”

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