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A shortage of skilled construction workers is a major culprit behind weakened housing supply and housing affordability in the new-home market, according to a new report by the Home Builders Institute.
“The construction worker shortage has reached crisis level. The construction industry needs more than 61,000 new hires each month if we are to keep up with both industry growth and the loss of workers either through retirement or simply leaving the sector for good,” says Ed Brady, HBI president and CEO. “From 2022 through 2024, this total represents a need for an additional 2.2 million new hires for construction. That’s a staggering number.”
Home sales are outpacing home construction. That has resulted in a backlog of new homes to build as well as supply chain bottlenecks, the report notes.
Since the beginning of 2012, about 10 million new homes for ownership and rent have been built. However, more than 12 million new households have been formed since that time, according to the report.
“The U.S. is experiencing a historically low supply of homes for sale, especially at the lower price points that newly formed households tend to need,” Brady says. “For residential construction to expand and housing affordability to increase, more skilled building trade workers must be recruited and trained for the home building sector.”
The report calls for greater attention to construction job opportunities and an increase to workers’ pay while balancing the need to keep homeownership affordable. Half of payroll workers in construction earn more than $50,460 annually. The top 25% earn at least $71,000. The report also called for an increase in trade skills education for veterans and transitioning military.