Home-Building Jobs Surge to 6-Year High, But Challenges Remain

Home-Building Jobs Surge to 6-Year High, But Challenges RemainSomewhat lost in the mostly positive jobs report Friday was another good harbinger for the housing market: constructions jobs surged in February to their highest level in six years.
The report was mostly good news for the home-building sector, which added 19,000 jobs in February and 56,000 since October, amounting to a four-month string of 10,000-plus gains.
It isn’t all rosy, however, for the home construction sector.
While housing starts are up 24 percent from a year ago, residential construction employment is up only 3.1 percent, according to the U.S. Commerce and Labor Departments.
Former workers in the home construction field have already moved on to higher paying jobs, such as the trucking industry, reported CNBC.com
Some home-building workers in the Southwest headed north to join the thriving energy sector. Others headed to highway construction jobs in Texas.
“One of the reasons is because they are not paying well yet,” Lisa Marquis Jackson, an analyst with John Burns Real Estate Consulting, told CNBC. “The wages were cut so much in the downturn, so until those prices get back to where they are attractive, the labor is not going to be attracted back to the industry.”
The rebounding housing market is being driven by pent-up consumer demand but still faces a number of obstacles, including tight credit for builders “along with a stretched lot and building supply system in many markets that are barely keeping up with demand,” the National Association of Home Builders said in a statement recently.
“Unfortunately, new-home production is facing a number of obstacles and failing to bounce back at a more robust rate,” said NAHB Chairman Rick Judson, a home builder from Charlotte, N.C. “Builders can’t obtain financing to construct new homes and developers have not been able to restart the lot production pipeline because of the lack of credit, which is contributing to buildable lot shortages in some markets.”
Meanwhile, creditworthy borrowers can’t obtain mortgages, inaccurate appraisals are leading to cancelled home sales, and rising building material prices and spot labor shortages are pushing up costs and slowing completion times, the NAHB said.
The national median price for newly built homes jumped 2 percent in January, and new home prices now far exceed the median price for existing homes.

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