The National Association of Home Builders (NAHB) reports shortages in labor and subcontractors continued to impact the industry in July, according to the latest Housing Market Index Survey.
According to the report, labor shortages ranged from 47% for building maintenance managers to a high of 83% for framing crews. When averaged across the occupations followed by the NAHB since the 1990s, the index of shortages reached 69% in 2019—the highest number on record.
Framing crews and rough carpenters showed the highest levels of “serious shortage,” according to the survey, at 34% and 28%, respectivley. Of the 16 occupations tracked by the NAHB, all but one —weatherization workers—had a serious shortage of more than 10%.
The release also shows that the shortages impact is “especially severe” when compared to housing starts, which have not yet fully recovered since 2011. Housing starts, however, have seen a moderate increase in recent years. The NAHB reports that since 2012, labor shortages grew from nearly 20% to the current 69%.
When asked how shortages have impacted their businesses, 87% of those surveyed said it has forced them to provide higher wages, 81% have difficulty completing a project on time, and 75% say the shortage forces them to raise home prices.
Additionally, 35% of respondents said the shortage has caused projects to be unprofitable, and 17% lost or cancelled sales.
Home prices, according to the latest CoreLogic Case-Shiller U.S. National Home Price Index (HPI), show no signs of falling from their ascent, as prices rose 3.4% in May 2019.
Las Vegas led the nation with a 6.4% year-over-year price increase, and was followed by Phoenix’s 5.7% increase. CoreLogic states that seven of the 20 cities in the composite reported higher price increases in the year ending May 2019 than the year ending April 2019.
A report by Redfin also found that in June home prices rose 8.75 for the most affordable third of homes nationally. Home prices rose just 1.1% year-over-year for the most expensive homes.
“For the most expensive tier of homes, supply has been rising on a year-over-year basis since mid-2013. But for the most affordable tier, supply has been dropping since at least 2012, and most months during that period it has dropped by double digits,” Redfin states.