Labor shortage is threatening housing inventory, affordability

November 18, 2021

A recent report by the Home Builders Institute, based on research by the National Association of Home Builders Economics Group, shows the lack of skilled construction labor has become a significant limiting factor for improving housing inventory and affordability, according to www.forconstructionpros.com.

Based on NAHB’s analysis of Bureau of Labor Statistics data, the HBI Fall 2021 Construction Labor Market Report shows the number of construction workers required to keep up with demand is estimated at about 740,000 new hires per year for the next three years. The estimate was determined by approximating the required net growth in employment resulting from construction expansion plus the workers required to replace individuals who leave the sector permanently.

Ed Brady, HBI president and CEO, said the construction industry will need to hire more than 61,000 new workers each month to keep up with industry growth and the loss of workers through retirement or permanently leaving the industry.

“From 2022 through 2024, this total represents a need for an additional 2.2 million new hires for construction,” Brady said. “That’s a staggering number.”

Home sales continue to outpace home construction, resulting in an increase in backlog and supply chain bottlenecks. Although more than 12 million new households have been formed since the start of 2012, only 10 million new homes for rental or ownership were built during that period.

“The U.S. is experiencing a historically low supply of homes for sale, especially at the lower price points that newly formed households tend to need,” Brady said. “For residential construction to expand and housing affordability to increase, more skilled building trade workers must be recruited and trained for the home building sector.”

Brady said homebuilders and other contractors can take steps to increase the number of skilled construction trade workers, such as reaching out to schools to change the perception of careers in construction; offering competitive wages; attracting more women to the industry; tapping into the military; training and placing more minority and lower-income youth and adults for job opportunities; and promoting and working toward bipartisan approaches to sensible immigration policies.

Tags: Workforce

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