Homebuilders are hiring more workers and paying higher wages than ever before, a sign that we could see more affordable housing popping up in the near future. The industry saw 60,000 new jobs in February and wages saw a 6% growth Year-over-Year. This is the fastest growth that the industry has seen in the last 40 years.
The construction industry has definitely seen its fair share of setbacks over the years. Lack of supply, labor shortages and demand shortages have affected construction over the last 3 years. “The rise is positive news for an industry that has been grappling with chronic labor shortages”, says Odeta Kushi, First American’s Deputy Chief Economist. ”We need more homes built, and in such a labor-intensive industry, you need more workers to build more homes.”
Housing affordability remains at historic lows as the lack of available homes for sale has driven competition and pricing up. However, higher wages could lead to more affordable housing being built. The downturn in construction is due to many factors, however mostly due to the shortage of skilled workers. Kushi stated that this has been an issue for almost a decade now, however she is optimistic that we are beginning to see an upswing. ‘Attracting skilled labor will remain a key objective for construction firms in the coming quarters and will become more challenging as the labor market strengthens and the unemployment rate declines.” If the homebuilding sector welcomes more workers, it could relieve the housing market of its affordability issues.