Labor shortages have been impacting single-family builders, according to the National Association of Homebuilders (NAHB). The NAHB found that across the 15 occupations covered by the survey, builders reported between a 47 percent decrease (for building maintenance managers) to 83 percent (for rough carpenters). According to the NAHB and data from the NAHB/Well Fargo Housing Market Index, these labor shortages have forced builders to pay higher wages/subcontractor bids (reported by 84 percent of builders), forcing them to raise home prices (83 percent) and making it difficult to complete projects on time (73 percent).
The NAHB notes that although these three factors have consistently been reported as the most common impacts of labor shortage since 2015, all three have become more common recently. According to the recent report, builders say that the labor and subcontractor shortages have contributed most heavily to increases home prices, which has increased by 22 percent between 2015 and 2018.
The survey found that the cost for building the same house, has increased in the last 12 months, outpacing inflation. The NAHB notes that while overall inflation was 2.9 percent in 2018, labor costs for subcontractors increased by 7.2 percent in that same time frame, and by 5.2 percent for labor. The NAHB notes that the incidence of shortages was higher for subcontractors than for labor directly employed by builders in 14 of the 15 occupations covered by the survey.
In addition to price increases, NAHB survey respondents stated that the decrease in labor has also slowed down the rate they accept incoming orders doubled between 2015 and 2018, and has impacted the amount of orders they can take on. The rate has doubled, from 16 to 32 percent. In addition, the rate of lost or cancelled sales was up to 26 percent.
The NAHB notes that the shortage of workers may be due to the number of workers who were laid off during the housing crisis returned to work for larger companies.