How the Skilled Labor Shortage Is Slowing New Home Development
A national shortage of skilled construction labor is prolonging a housing crisis defined by low inventory and affordability. The NAHB is estimating that 740,000 workers will need to be hired each year for the next three years to keep up with market demand.
Labor shortages are a key restraint in today’s market, but a scarcity of construction workers can be traced back to the Great Recession, when the industry lost over a million employees, Multi-Housing News reports. As the construction industry struggles to recruit, train, and retain workers, delayed projects and lingering inventory shortages will continue to limit affordability for homebuyers.
Housing inventory and affordability will continue to be weakened by the shortage of skilled construction labor, according to a new report by the Home Builders Institute (HBI).
The estimations contained in the HBI Fall 2021 Construction Labor Market Report are based on a new analysis of Bureau of Labor Statistics data by the National Association of Home Builders (NAHB). The number of new workers needed yearly to keep up with demand is estimated to be 740,000 each over the next three years.
The HBI report offers a number of other key findings. The number of open construction sector positions averages between 300,000 and 400,000 monthly. Residential construction represents about 3.1 million of the total construction employment of 7.42 million. Construction sector self-employment tallies 22 percent of today’s labor force, a decrease from the 26 percent in 2010. Women comprise a modestly growing share of construction employment, up from 10.3 percent in 2019 to 10.9 percent in 2020.