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Economics

New challenge: Homebuilders say they can’t find labor workers

Homebuilders are slow to deliver homes, claiming they can’t find labor workers – how did this come to be?

new home construction

The construction labor market reached a peak in 2006, but the economy couldn’t sustain the number of workers when the real estate market dropped. Now that employment is back up, new home builders are seeing an improvement in purchases.

This should be good news, but instead of facing a lack of customers, they’re now seeing a labor shortage in carpenters and electricians that is making it difficult to meet demand. In Arizona, it can take up to a year to complete a new home when it used to take five to six months.

Lack of workers holding homebuilders back

Shea Homes, Hovnanian Enterprises Inc., William Lyon Homes, and Meritage Homes Corp. have all pointed to the lack of workers as the reason many homes are not being completed as quick as desired. Earlier this year, this situation was more isolated. There were just a few markets that experienced slow building times, but it is becoming much more widespread.

Although some economists think that the shortage is bogus based on the evidence. Construction wages are not rising as fast as they would if there was truly a shortage. The unemployment rate for construction workers should be lower too. In August 2015, the rate was 7.5 percent. According to the economists at J.P. Morgan Chase & Co. the data doesn’t support the anecdotal complaints.

NAHB says specialties are lacking

The National Association of Home Builders says that the disconnect between the builders and economists is because of specialties that are most in demand. The industry needs framers and carpenters, which are skillsets not easily transferable to other fields.

It takes training and experience to understand the specifications of construction, which means it won’t be an easy fix to get laborers.

NAHB explains the shortage

The reason for the worker shortage can be attributed to increased border enforcement and an increased Mexican economy, which keeps international workers from coming to the country. It’s estimated that about 22 percent of the construction laborers are foreign born. The housing recession forced many workers to find alternate employment, which also depleted the work force.

The Texas market is also facing a number of delays in new home building not just due to a lack of laborers but because of heavy rains in the spring. Workers could not pour concrete and many properties were damaged during the torrential downpours that plagued the state. Although many companies are looking outside of their local markets to expand the labor force, it is still going to take time to build a new home.

#BuilderCrisis

Dawn Brotherton is a Sr. Staff Writer at The American Genius with an MFA in Creative Writing from the University of Central Oklahoma. She is an experienced business writer with over 10 years of experience in SEO and content creation. Since 2017, she has earned $60K+ in grant writing for a local community center, which assists disadvantaged adults in the area.

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