For years, the U.S. homebuilding industry has been facing a skilled labor crunch. It’s shaking up everything from construction timelines to customization options.
But what’s causing this shortage – and how is the industry coming together to resolve the housing crunch? Here are three things every homebuyer needs to know.
What’s causing the labor shortage in the home construction industry?
There’s been a perfect storm of factors causing labor shortages and, in turn, a backlog of housing supply.
Experienced workers from the baby boomer generation are retiring
There’s a lack of interest in the trades from younger generations
There are still lingering effects of the pandemic’s so-called Great Resignation
In any given month, there’s a shortage of 200,000 to 400,000 construction workers. Homebuilders will need to add 2.2 million new workers over the next three years just to keep up with demand, according to the National Association of Home Builders.
By 2031, over 41 percent of the current construction workforce is expected to retire, based on government estimates.
The labor shortage’s impact on homebuyers
It takes a village to construct a home – carpenters, electricians, plumbers, HVAC specialists. If fewer workers are available to frame homes, install key systems, and get properties to the finish line, your move-in date may be delayed.
The average increase in construction time due to the labor shortage is nearly two months.
Small builders experience an even greater delay.
These longer construction times amount to roughly $2.6 billion annually.
As a homebuyer, you may be shielded from feeling the effects of the labor crunch because builders have been focused on ensuring buyers move into their dream home on schedule, maximizing their efficiency.
That may mean fewer:
Bespoke features
Niche materials
If you’re sticking to what’s on offer in builders’ repertoire, you’re more likely to stick to your closing date. Talk to your builder about timelines and staffing if you’re concerned.
The workforce is being revitalized – including a call for tradeswomen
The labor shortage has been a longstanding challenge. The industry is now responding in a handful of proactive ways:
1. They’re promoting careers in construction to the next generation …
Estimates suggest that for every five people that retire, the industry is bringing in approximately two new workers. That should improve, as there’s been a push from the government to the private sector, including The Home Depot and Lowe’s, to encourage young people to consider a future in construction – and home building specifically.
They’re launching initiatives, such as promoting the trades in as early as high school, developing apprenticeships and pre-apprenticeships for hands-on experience, and providing scholarships for students pursuing construction.
And it’s working: they’re now seeing enrolment in electrical installation, construction finishing, inspection, carpentry, plumbing and other majors increasing year-over-year.
2. … Including young women
Another important approach to regenerating the construction workforce is an appeal to young women to consider a career in construction.
Women now make up a growing share of construction employment, reaching 10.8 percent in 2023, and up significantly from 9.1 percent in 2017.
Look to non-profits like She Built and SkillsUSA who have made it their mission to help young women actually envision themselves in what’s been viewed as a male-dominated industry – and to believe that they can do it. The Natinoal Association of Women in Construction designates a week each year, typically early March, as Women in Construction Week.
It’s invaluable work in diversifying the construction workforce.
3. They’re increasing wages
Average hourly wages have been boosted by 4.3 percent over the last year. The average hourly wage for construction workers was $38.30 in 2024 and will have crept up into 2025. That’s higher than the national average wage for all U.S. occupations at $35.10.
4. They’re mastering innovation and getting creative
While these initiatives have been activated in full force, those on the ground constructing homes are getting better – day by day – at taking advantage of innovation.
From 3D printing to modular homes, they’re learning how to streamline operations, work faster with shorter build times, and more efficiently with materials – and all without compromise to the final product.
There’s automation, prefabrication, and augmented reality for upskilling, all helping to reduce manual labor and embrace a tech-savvy approach to building homes.
And it’ll only get better as AI, construction software, drones, and other cutting-edge technologies are introduced into the field.
Carmen Chai
Carmen Chai is an award-winning Canadian journalist who has lived and reported from major cities such as Vancouver, Toronto, London and Paris. For NewHomeSource, Carmen covers a variety of topics, including insurance, mortgages, and more.