Photo: David McSpadden/Flickr
In December, the National Association of Home Builders (NAHB) surveyed US single family homebuilders about the problems they faced in 2016 and expect to face in 2017. The cost and availability of labor ranked as the top concern of respondents for both years, according to the survey results.
The survey was conducted in December as part of the monthly NAHB and Wells Fargo Housing Market Index, which includes “special” survey questions each month on topics of relevance to homebuilders.
At 78 percent, the majority of homebuilders who took the survey said that labor cost or availability was their top issue in 2016. Labor has been a growing concern of builders since 2011, when only 13 percent of builders cited labor as an issue. That number has grown exponentially over the years since — rising to 30 percent in 2012, 53 percent in 2013, 61 percent in 2014, and 71 percent in 2015.
Meanwhile, 82 percent of respondents believed labor would continue to be a problem in 2017. But following President Trump’s executive orders on immigration signed earlier this week, that number could actually be higher if illegal immigrants are, in fact, deported.
The cost and availability of developed lots was the number two concern of builders. Sixty percent of respondents cited it as a concern in 2016, while 67 percent said they expected it to be a problem in 2017 as well.
Interestingly, one of President Trump’s big promises to homebuilders while campaigning was to cut the “excessive” banking regulations on the industry. However, only 55 percent of builders felt banking regulations were an issue in 2016, and only 48 percent felt it would be an issue in 2017 — perhaps banking on President Trump to fulfill that campaign promise.
While most of the top ten concerns of respondents merely fluctuated a few percentage points, building material prices jumped from 48 percent in 2016 to 60 percent in 2017. This was the largest fluctuation in the NAHB data.
Other concerns cited were fees, federal environmental regulations, state and local regulations and policies, inaccurate appraisals, development standards and health insurance.
Click here to read the entire report.