If You Don’t Like Prices, Blame the Labor Shortage
Paul Emrath | August 7, 2019
A shortage of subcontractors continues to hit the new-home market, placing upward pressure on home prices, according to the latest reading from the National Association of Home Builders and Wells Fargo Housing Market Index. The index asked builders about the specific shortages they’re facing among 15 different occupations. Framing crews, carpenters, and bricklayers are among the worst shortages, the index showed. Subcontractors account for three-fourths of construction costs in a typical new home, the NAHB notes. The labor shortage over the past year has meant builders have had to pay higher wages to attract subcontractors and have faced greater difficulty in completing projects on time. Seventy-five percent of builders surveyed say the shortages have also translated into higher home prices. “The impact of the labor shortage on home prices is particularly significant, as this is one of the factors contributing to the ongoing and serious problem of housing affordability,” the NAHB notes on its blog, Eye on Housing.
Source: National Association of Home Builders Eye on Housing Blog