New study reveals economic impact of housing labor shortage

Washington, D.C.—The Home Builders Institute (HBI) collaborated with the National Association of Home Builders (NAHB) to release a landmark study examining the economic impact of the skilled labor shortage for the single-family home building sector. The findings indicate that the skilled labor shortage’s impact on the residential construction industry is a multibillion-dollar annual challenge that is responsible for the lost production of thousands of newly built homes.

Commissioned by HBI and conducted by the University of Denver, the study’s findings were supplemented with an analysis by NAHB in an effort to provide a comprehensive view of the implications of this workforce challenge.

The skilled labor shortage in the home building sector presents a challenge that has significantly impacted the production of new homes. As home builders face higher construction costs and prolonged building times, the supply of new homes continue to fall, fueling the housing affordability crisis and hindering economic growth.

“This study underscores the urgent need for strategic interventions to address the skilled labor shortage,” said Dr. Robert Dietz, chief economist of NAHB. “The economic implications are vast, affecting not only the home building industry but also the broader economy.”

The executive summary highlights several crucial findings:

• Annual economic impact: The study estimates an aggregate economic impact of $10.806 billion per year due to longer construction times associated with the skilled labor shortage.
• Higher carrying costs: The direct cost impact of extended construction times amounts to $2.663 billion annually.
• Lost production: The shortage has led to a reduction of approximately 19,000 single-family homes not built in 2024, representing an economic loss of $8.143 billion.
• Incremental construction time: The unweighted average increase in construction time due to the labor shortage is 1.98 months, with smaller builders experiencing an even greater delay.

Both the NAHB and HBI said it is committed to addressing this issue through collaborative programs, education initiatives and advocacy efforts. The organizations aim to boost the skilled labor workforce and mitigate the adverse economic effects highlighted in this study.

“The Home Builders Institute (HBI) is proud to be part of the solution to the nation’s skilled labor shortage,” said Ed Brady, HBI president and CEO. “Through hands-on training programs and industry-recognized certifications, HBI is equipping the next generation of construction professionals with the skills needed to meet growing demand. As our graduates enter the workforce, they help fill critical labor gaps—strengthening the residential construction industry and contributing to lower housing costs across the country.”

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