Rise of the Housing Market Halted by Lack of Workers

Rise of the Housing Market Halted by Lack of Workers

The housing market has been steadily on the rise and projections are looking optimistic. But those projections would be even more positive if they took into account the reality of the construction industry.

Sales of new homes have reached a nine-year high this July. It looks like the dark times of the sub-prime loan bubble is in the past. People are buying new homes again.

However, even more homes would be sold if more homes could be built. Demand for new homes is high, but construction companies are actually turning down jobs. The reason? For most of them because they are under-staffed.

Construction Sites Looking for Workers

Suburban Denver is where Jay Small owns a company that frames houses. He is building 1,300 new homes by the end of this year. That is more than three times the number of houses that he was building a few years ago. He says that back then the residential construction industry had few jobs to offer to those seeking employment.

Jay Small estimates that he could build about 10% more homes if he had enough workers. He has raised pay to levels above the wages earned by construction workers at the height of the housing bubble a decade ago. Yet he remains short-staffed.

“It’s getting to the point where you’re really limited in what you can deliver,” Small said.

Nationwide, statistics say that there are 17% fewer people that are now working in construction than at peak of the market. Some states – like Arizona, Georgia and California have percentages of 20% or more. The data has been supplied by Associated General Contractors of America.

Jobs in the Construction Industry

When the housing bubble burst, the effects on the construction industry where significant and immediate. It is estimated that in the aftermath of the housing bust, 30% of qualified construction workers found work in new fields.

It’s been eight years and right now homebuilders across America are looking for workers for their sites, regardless of level of experience. According to data from the National Association of Homebuilders there are 200,000 construction jobs in the US that are unfilled. That’s up a whopping 81% in the last two years.

The Department of Labor recently measured the ratio of construction job openings relative to hiring. It is at its highest level since the year 2007.

The state of Colorado alone is going to need 30,000 more workers in the construction industry during the next six years. That number does not even account for those who are going to retire, says a study realized by the Association of General Contractors.

To anticipate that, the state passed a bill to use $10 million over the span of three years to fund tuition-free training for plumbers, carpenters and electricians.

On-the-job training is also a way to come up in the industry for new workers. It is not uncommon to receive on-site training after entering a construction site. The new skills acquired amount to a new qualification and open up more opportunities for the now skilled worker. It also helps to fill one more vacancy for an industry that badly needs workers.

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