The Turn of the Screw

Labor shortages have become more frequent in 2018 for home builders, prompting project delays, rising home prices, and higher wages.

According to analysis from the National Association of Home Builders, 84 percent of builders report having to increase wages and subcontractor bids as a result of the tightness of the available labor and subcontractor pool, with labor cost growth outstripping inflation. Seventy-three percent of builders surveyed said their projects are not being completed on time, and 83 percent said they've had to raise home prices, which had the "steepest upward trend" of all the effects measured, growing 22 percent from 2015 to 2018.

Last Thursday’s post reported on the record share of single-family builders reporting shortages of labor and subcontractors in the July survey for the NAHB/Well Fargo Housing Market Index ... [The factors listed] have consistently ranked as the most commonly reported effects of the labor and subcontractor shortages since NAHB began asking builders about them in 2015. However, all three have become even more common recently.

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