Home builders are having a tough time finding workers, according to key movers within the industry. Less workers means higher labor costs and longer completion times, which will ultimately cause the prices of houses to go up.
During the 2008 recession, housing development ground to a halt, causing many workers to lose their jobs. Many now work in other industries such as the manufacturing, auto, and energy sectors. In the case of immigrant laborers, large numbers have even returned to their home countries, and new immigrants seem to be shying away from the industry. As a result, home building only currently employs about 2.7 million workers, compared to 3.4 million in 2006.
In terms of skilled labor, builders also face a graying problem. Many people in positions that require some technical training are getting older and older. New workers are not entering into these trade jobs, which have generally become devalued in society over the course of the last four decades.
All of this comes at a time when demand for US homes is on the rise, leading to tight inventory levels. Builders must compete for recruits by offering higher wages, which in turn raises labor costs. With fewer workers and more spaced out deliveries, it can take up to two months longer to complete a home.
Industry organizations such as the Home Builders Institute are coping with the labor shortage by providing educational programs for students, under-served youth, veterans and former prisoners. Builders are also starting to build more home parts in-house rather than on the construction site so as to reduce supply deliveries. But until more workers enter the industry, home prices are likely to remain high.
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