Labor Shortages in New US Home Building Lessen but Remain Above Housing Boom of 2004–06

According to the latest results from the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) survey, with home building volumes lower, labor shortages have eased significantly since the record level set in 2021. Nevertheless, they remain widespread in historic context.

The February HMI survey asked builders about shortages in 16 specific trades. The percentage of builders reporting a shortage (either some or serious) of labor they employ directly ranged from a low of 33% for landscape workers to a high of 65% for those performing finished carpentry.

The NAHB notes that the finished carpentry shortage was down from its all-time high of 85% in 2021 to 72% in 2023. Nonetheless, it remains higher that it was at any time during the 2004–06 housing boom when it reached a peak of 58% in July 2005.

In the typical case, most of the physical work required to build a home is performed not by laborers employed directly by the builders, but by subcontractors. As a 2020 NAHB study showed, builders on average use two dozen different subcontractors and subcontract out 84% of their total construction costs to build a single-family home. The February HMI survey also collected information about shortages of subcontractors. The percentage of builders reporting a shortage of subcontractors ranged from 35% for building maintenance managers to 63% for finished carpenters.

For all 16 trades, the shortage percentages for subcontractors and labor directly employed were fairly similar. Averaged over the nine trades that the NAHB has covered in a consistent way since the 1990s (carpenter-rough, carpenter-finished, electricians, excavators, framing crews, roofers, plumbers, bricklayers/masons, and painters), the share of builders reporting shortages in February was 52% for labor directly employed and 51% for subcontractors.