Labor writ large became home builders' No. 1 pain point, starting last year, and continuing this next 12 months. The monthly NAHB/Wells Fargo Housing Market Index report released by the National Association of Home Builders discloses that cost/availability of labor retained its distinction as the biggest headache for builders in 2016.
National Association of Home Builders economics staffer Ashok Chaluvadi digs into the survey results and lays out other challenges that builders foresee in the new year. Chaluvadi writes,
"Topping the list of problems builders faced in 2015 and expect to face in 2016 is the Cost/Availability of Labor, an issue for 76% of builders who expect it to increase in 2016 and which has increased in importance the past three years. In 2013, 53% of builders rated labor as a significant problem, followed by 61% in 2014 and 71% in 2015. An expected skilled labor shortage can constrain an improving housing market.
The second most significant problem was Cost/Availability of Developed Lots for 59% of builders for 2016. In 2013, the Cost/Availability of Lots was rated significant by 46% of builders who responded to the survey. That share increased to 55% in 2014 and again to 58% for 2015. Both the availability of labor and lots highlight the expected constraints of a recovering housing market."