HBI Report Reveals Economic Impact of Labor Shortages on Housing Production
The skilled labor shortage is responsible for the lost production of thousands of newly built homes, according to the Home Builders Institute’s (HBI’s) Fall 2025 Construction Labor Market Report. The report quantifies the size and impact of the skilled labor shortage at $10.8 billion per year.
NAHB’s economics team found that the aggregate annual impact of the skilled labor shortage in the home building sector is $2.663 billion in terms of higher carrying costs and $8.143 billion in terms of lost single-family home building (19,000 homes). This represents a combined aggregate economic effect of $10.806 billion because of longer construction times associated with scarce skilled labor.
Other key findings in the report include:
- There are currently 3.3 million payroll residential construction workers.
- Amid a dramatic slowdown in the job market, home builders and remodelers lost 26,100 jobs over the last 12 months.
- Home building non-supervisory workers’ wages trended higher, rising 9.2% in July, substantially outpacing inflation and wage growth for the overall sector.
- Women make up a growing share of the construction employment, reaching a 20-year high of 11.2% in 2024. This is a noticeable increase from 9.1% in 2017.
- Immigrant workers now account for 25.5% of the construction workforce, a new historic high. In construction trades, the share of immigrants is even higher, with one in three craftsmen coming from outside the United States.
- The percentage of Gen Z (those born between 1997 and 2012) individuals participating in the construction labor workforce has more than doubled, increasing from 6.4% in 2019 to 14.1% in 2023.
- For the time being, the impact of AI on the home building industry is limited but is likely to evolve in the coming years.
To learn more about the residential construction labor market, view the report.