Not Enough Workers to Meet Demand for New Homes

Wow, how’s that for a headline?!

But it appears to be true, as Diana Olick reports here.

The shortage is across the spectrum, but especially in need are framers, concrete workers, plumbers, roofers and painters. The shortage is also felt most in areas where housing is coming back strongest, and permitting is easiest, like Texas and much of the West. 

Ms. Olick also links up to a column she wrote earlier US Homebuilders Begin to See Credit Thaw.

Much of the demand is coming from potential buyers who have been shut out of the lower-priced, distressed market by avid, all-cash investors. The big public builders, almost across the board, reported huge jumps in new orders in the first half of this year. Smaller builders are still hampered by lack of credit to build and therefore meet the demand. Construction loans nearly ground to a halt after the latest housing crash.

I wonder whether these smaller credit-constrained  homebuilders are quantitatively important in holding back aggregate construction expenditure?

In any case, it certainly looks like things are looking brighter for the homebuilders. Toll Brothers, for example, is up around 100% over the past year. Have we turned the corner here?

About David Andolfatto 95 Articles

Affiliation: Simon Fraser University and St. Louis Fed

David Andolfatto is a Vice President in the Research Division of the Federal Reserve Bank of St. Louis. He is also a professor of economics at Simon Fraser University.

Professor Andolfatto earned his Ph.D. in economics from the University of Western Ontario in 1994, M.A. and B.B.A. from Simon Fraser University. He was associate professor at the University of Waterloo before moving to Simon Fraser University in 2000.

His current research is focused on reconciling theories of money and banking. His past research has examined questions relating to the business cycle, contract design, bank-runs, unemployment insurance, monetary policy regimes, endogenous debt constraints, and technology diffusion.

Visit: MacroMania, David Andolfatto's Page

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