This Has Homebuilders the Most Worried

February 9, 2016

The cost and availability of labor is the top challenge homebuilders expect to face this year – an issue that has been growing in concern over the past three years, according to the latest National Association of Home Builders and Wells Fargo Housing Market Index.

“An expected skilled labor shortage can constrain an improving housing market,” according to the builder’s tradegroup.

Seventy-six percent of builders recently surveyed say that the cost and availability of labor will be a growing problem in their businesses this year. For comparison, in 2013, 53 percent of builders cited labor as a significant problem.

The following are the top 10 “significant problems” builders say they expect to face in 2016:

  1. Cost/availability of labor: 76%
  2. Cost/availability of developed lots: 59%
  3. Federal environmental regulations and policies: 57%
  4. Building material prices: 56%
  5. Impact/hook-up/inspection or other fees: 55%
  6. Concern about employment/economic situation: 55%
  7. Regulation of banking/financial institutions: 53%
  8. Gridlock/uncertainty in Washington making buyers cautious: 53%
  9. Local/state environmental regulations and policies: 49%
  10. Inaccurate appraisals: 48%

Source: “Labor Is Top Challenge for Builders,” National Association of Home Builders’ Eye on Housing Blog (Feb. 8, 2016)