The National Association of Home Builders (NAHB) reports [1] 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), [2]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 [3]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.