Labor Shortages Remain Top Concern for Builders


The cost and availability of labor continues to stand out as the most significant challenge that builders will face in 2020, according to a recent survey of members that ran in the monthly NAHB/Wells Fargo Housing Market Index (HMI).

More than four out of five builders – 85% – expect to face serious challenges regarding the cost and availability of labor this year, down slightly from the 87% who rated this issue as their top concern in 2019.

Building material prices and the cost and availability of lots were tied as the No. 2 problem expect to face in 2020, with these issues cited by 66% of the survey respondents.

All three of these supply-side issues have been a growing concern for builders over the past several years. To put it into perspective, in 2011, just 13% of builders cited labor issues as an important concern, with the rate steadily rising over the ensuing years before peaking at 87% last year.

Likewise, the cost and availability of lots were reported as a significant problem by 21% of builders in 2011, and the percentage steadily increased over the following years, reaching a high of 66% in 2020.

Meanwhile, building material prices was reported as a significant problem by 33% of builders in 2011. In the ensuing years, builder concerns regarding this issue ranged from 42% in 2015 to a peak of 87% in 2018.

Rounding out the top five concerns for builders in 2020 are impact/hook-up/inspection or other fees (60%) and gridlock/uncertainty in Washington making buyers more cautious (56%).

NAHB economist Ashok Chaluvadi provides more analysis on the labor shortages and the rest of the top 10 list in this Eye on Housing blog post.

Subscribe to NAHBNow

Log in or create account to subscribe to notifications of new posts.

Log in to subscribe