Top Challenges for Builders: Cost/Availability of Labor in 2019 & 2020

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Cost and availability of labor topped the list of problems builders faced in 2019, and is expected to return to the number one spot in 2020, according to special questions on the December survey for the NAHB/Wells Fargo Housing Market Index.   The survey results showed that cost and availability of labor were a significant issue for 87% of builders last year.  In 2020, however, a slightly smaller share – 85% of the builders – expect them to continue being a problem.  The second most widespread problem in 2019 was building materials cited by 66% of builders. Unlike cost and availability of labor, the share of builders expecting building materials to be a problem this year is the same as share reporting it a problem last year.

In 2011, cost and availability of labor was reported as a significant problem by only 13% of builders. The  share increased to 30% in 2012, 53% in 2013, 61% in 2014, 71% in 2015, 78% in 2016, 82% in both 2017 and 2018, before peaking at 87% in 2019. Meanwhile building materials prices was reported as a significant problem by 33% of builders in 2011, followed by 46% in 2012, 68% in 2013, 58% in 2014, 42% in 2015, 48% in 2016 and 77% in 2017, 87% in 2018 and 66% in 2019.

Another significant problem that builders faced in 2019, and is expected to face in 2020 is cost and availability of developed lots. In 2011, cost and availability of lots was reported as a significant problem by 21% of builders. The share increased to 34% in 2012, 46% in 2013, 55% in 2014, 58% in 2015, 60% in 2016, 58% in both 2017 and 2018, 63% in 2019 and 66% of builders expect it be a problem in 2020.

Compared to the supply-side problems of materials, labor and lots, problems attracting buyers were not as widespread last year, but builders expect many of them to become more of a problem in 2020.  Gridlock/uncertainty in Washington making buyers cautious was a significant problem for 45% of builders in 2019, compared to 56% who expected it to be an issue in 2020. Negative media reports making buyers caution was a significant problem for 39% of builders in 2019, but 44% expect it to be a problem in 2020.  Concern about employment/economic situation was a problem for only 25% of builders in 2019, but 32% expect it to be a problem in 2020.

For additional details, including a complete history for each reported and expected problem listed in the survey, please consult the full Survey Report.



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