US homebuilders are struggling to assemble the crews they need to build new houses, which could hold back the rebound of a sector that has been the bright spot in the world’s largest economy.
Low borrowing rates, an improving labour market and rising consumer confidence have encouraged more Americans to buy houses, which has depleted existing stocks and spurred new construction. This has created a deficit of skilled laborers such as electricians, plumbers, roofers and mason.
Contractors pared down their workforces after the housing market collapse. Between the April 2006 peak and January 2011 trough, total home building employment, which includes builders and trade contractors, fell almost 43 per cent from 3.45m to 1.984m, according to the Bureau of Labor Statistics.
A lack of developable plots, as more builders scramble for land to meet growing demand, and rising construction material costs are other factors hampering homebuilders alongside rising mortgage interest rates and tight mortgage qualification standards.
States worst hit by the housing bust, including Arizona, Florida, Nevada and California, have been the ones to bounce back the fastest and are where labour shortages are chronic,
A National Association of Home Builders survey published last month showed 48 per cent of single-family home builders could not find framers – those who assemble the major structural elements of a house – in the first three months of this year, up from 30 per cent in the middle of last year.
Industry watchers say worker shortages are also affecting apartment construction as well as rental housing refurbishment.
Residential construction employment per housing start stands at 2.5 workers per start, however, which is higher than a more normal level of 1.5.
Labor shortages are leading builders to pay out higher wages as competition for workers grows. In turn homebuilders are offsetting inflation in land, labour and materials with house price increases.
The median price of a new home sold in April was $271,600, the highest level on government records going back to 1993. New home sales figures for May, due for release on Tuesday, are expected to show continued tight supply and strong demand, up at a 460,000 annual rate in May from April’s 454,000.
Sheila McKinney
