The homebuilding sector is hiring more workers and increasing wages, which could lead to more affordable housing, according to businessinsider.com.
The Bureau of Labor Statistics reports the construction industry added 60,000 jobs in February, and wages for nonsupervisory positions grew at the fastest rate in 40 years.
“Average hourly earnings in construction are up 6% on a year-over-year basis in February, the fastest pace since 1982,” said Odeta Kushi, First American’s deputy chief economist. “Attract and retain more builders and there will be more groundbreaking on new homes.”
The increase in employment and wages is a bright spot for homebuilders who have been struggling with labor shortages and a lack of building materials. A boost in homebuilding could result in more affordable housing.
Housing affordability is at historic lows as lack of inventory has increased buyer competition, and a labor shortage has stalled construction projects throughout the U.S.
An October 2021 survey conducted by the National Association of Homebuilders showed more than 55% of single-family homebuilders reported a shortage of labor across 16 homebuilding trades. It also reported subcontractor shortages are even more widespread than “shortages of labor employed directly by general contractors.” However, February data allows for optimism as the rate of residential building is up 6.2% compared with pre-COVID-19 levels.
“Higher costs in construction due to labor scarcity is one factor responsible for recent home price gains,” said Robert Dietz, NAHB chief economist. “The future of homeownership depends on the cost of new housing, and improvements can only be made through industrywide efforts to improve the labor outlook.”
