home construction

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On the construction side, homebuilders as well as land developers found it hard to finance projects because of high short-term interest rates. On the consumer side, a large number of prospective buyers sat on the sidelines as housing affordability worsened.

Shelter remained the largest contributor to inflation in October, according to the CPI report. However, the rate of housing inflation is steadily falling and there are high hopes that interest rates will fall in 2024. 

“While builder sentiment was down again in November, recent macroeconomic data point to improving conditions for home construction in the coming months,” NAHB Chief Economist Robert Dietz said in a statement.

“In particular, the 10-year Treasury rate moved back to the 4.5% range for the first time since late September, which will help bring mortgage rates close to or below 7.5%. Given the lack of existing home inventory, somewhat lower mortgage rates will price-in housing demand and likely set the stage for improved builder views of market conditions in December.”

NAHB forecasts approximately a 5% increase for single-family housing starts in 2024 as financial conditions ease.

Homebuilders continued to make adjustments to boost their sales

According to the survey, 36% of builders cut home prices, up from 32% in the previous two months. It was the highest share of builders cutting prices recorded in one year.

According to the NAHB, the average price discount remained at 6%, unchanged from the previous month. 

All three major HMI indices posted declines in November. Homebuilders’ gauge of current sales conditions fell to 40. The gauge measuring traffic of prospective buyers declined to 21. And the component charting sales expectations over the next six months fell to 39.

The three-month moving averages for HMI all declined across the four major regions in November. The Northeast fell one point to 49; the Midwest dropped three points to 36; the South fell seven points to 42; and the West posted a six-point decline to 35. 

Source: housingwire.com

Apache is functioning normally

Apache is functioning normally

Cecilian Partners, a proptech firm that offers comprehensive digital solutions for home builders and land developers, has successfully raised $11 million in its first institutional equity round led by Resolve Growth Partners. This funding will enable Cecilian to accelerate product innovation, expand its workforce in crucial areas, and further enhance its customer success team.

John Cecilian, Jr., the company’s co-founder and CEO, expressed his excitement and validation upon receiving the term sheet from Resolve Growth Partners:

“This investment transitions us from a ‘scrappy start-up’ to a focused organization positioned to win. We are grateful to the team at Resolve and ready to accomplish meaningful growth and customer expansion.”

Despite a recent decline in early-stage funding, Resolve selected Cecilian Partners after conducting extensive due diligence and evaluating numerous SaaS companies. They were impressed by Cecilian’s impressive revenue growth, proven business model, and a clear path to profitability.

“We’re thrilled to have the opportunity to partner with John and the rest of the team at Cecilian Partners to build the category-leading platform for land developers and home builders,” said Resolve co-founder and Managing Partner Chris Rhodes. “This market has traditionally been underserved by technology. Cecilian offers a first-of-its-kind solution to help its customers transform their businesses through digitization and a true partnership approach.”

Since its establishment in 2019, Cecilian Partners has focused on serving the rapidly growing new homes segment in residential real estate. Their innovative software suite streamlines the land and property development process, consolidating data, automating manual tasks, and providing an enhanced customer experience throughout the homebuying journey.

Cecilian’s revenue tripled in the past year, surpassing the typical growth rate for early-stage SaaS companies. Additionally, their client base expanded by 65%. The company now serves builders and developers across multiple states, boasting over 75 clients in Texas and Florida alone, where nearly one-third of all new homes in the US are constructed.

In addition to securing funding, Cecilian was recognized for its achievements throughout the year. They were included in the HousingWire TECH100 list, honored with a PHL Inno Fire Award, and acknowledged as one of the best places to work in the greater Philadelphia area.

With Resolve’s support, Cecilian will accelerate its pace of product innovation and talent acquisition. They will also benefit from Resolve’s financial expertise and experience in building successful SaaS companies. As part of this strategy, the company’s Board of Directors will undergo restructuring, with Chris Rhodes and Rocco Natalicchio from Resolve joining the board. Stephanie McCarty, Chief Marketing & Communications Officer at Taylor Morrison, and Ned Moore, co-founder and CEO of Clutch, will continue to serve on the board, bringing their expertise in real estate development and SaaS markets, respectively.

Stephanie McCarty expressed her belief that Cecilian Partners is well-positioned to drive innovation in the new home construction industry. She highlighted the company’s expansive suite of products, which can address outdated processes and longstanding challenges, ultimately enhancing the experience for customers, builders, and developers.

With Resolve’s investment, Cecilian will rapidly expand its team by hiring key roles in business development, in-house technology and research, customer success, and marketing. These new hires will help capture growth opportunities, drive innovation, improve client support, and increase brand visibility across the country. Over the next 12-15 months, Cecilian plans to increase its workforce by 50%, with additional staff based in Chicago, Dallas, Raleigh, and their headquarters in New Hope, Pennsylvania.

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Mihaela Lica Butler is senior partner at Pamil Visions PR. She is a widely cited authority on public relations issues, with an experience of over 25 years in online PR, marketing, and SEO.She covers startups, online marketing, social media, SEO, and other topics of interest for Realty Biz News.

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Source: realtybiznews.com

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Building your dream home in Texas is an exciting journey, but it comes with its unique set of considerations, shaped by the state’s diverse landscapes and dynamic climate. In this Redfin article, seasoned Texas builders offer invaluable tips for both native Texans and newcomers. These insights will help you navigate the Lone Star State’s home construction landscape.

Essential pre-build tips for your Texas home

1. Figure out your budget and financing before getting started 

Managing your finances is a critical aspect of building a house in Texas. Before starting construction, establish a realistic budget that includes all aspects of the project, from land acquisition to finishing touches.

Building a spacious, energy-efficient home in the Dallas area may cost between $200 to $300 per square foot, depending on various factors. Research the current costs of materials and labor specific to that region to create an accurate budget. Consult with local banks or financial institutions to explore financing options, such as construction loans, which can provide you with the necessary funds to complete your project without draining your savings. 

Keep in mind that unexpected expenses can arise during construction, so having a financial buffer of at least 10% of your budget is advisable to ensure your project stays on track.

2. Create a realistic construction timeline

Texas’ weather can be unpredictable, which may impact your construction timeline. Work closely with your builder to create a realistic project schedule that takes into account potential weather delays.

For instance, if you’re building a home in San Antonio, where hot summers and occasional heavy rainstorms are common, your construction timeline should factor in weather-related disruptions. Effective project management is essential to keep the construction process on track.

3. Make sure you understand Texas building codes and regulations

Before embarking on your home construction project, it’s essential to familiarize yourself with Texas’ building codes and regulations. These codes can vary from one municipality to another, so it’s crucial to research the specific requirements in your area.

For example, if you’re planning to build a home in Austin, you should be aware of the city’s unique land codes and permitting processes. Multiple layers of review and inspections from various city departments are common in Austin. You can typically find information about local building codes on your local government’s website or by contacting the relevant permitting authorities.

4. Thoroughly research contractors and builders before selecting one

“Texas is known for its flexible contractor laws”, shares contractor review site Bad Texas Contractors. “Unlike many states, it does not require general contractors to be licensed. To safeguard your project, thoroughly research your contractor. Seek references and word-of-mouth recommendations from local homeowners. Visit ongoing construction sites to identify reputable builders. Ensure that the contractor’s claims are verified and that they have a solid track record.” 

5. Make sure your builder has local experience 

Local home builder Carty Custom Builders, LLC shares, “Building in Austin, TX, requires expertise due to the city’s complex land codes and permitting processes. Engage a builder experienced in Austin’s unique requirements, such as multiple layers of review and inspections from various city departments. Navigating these hurdles is crucial for a positive home-building experience in the city.”

6. Verify builder’s associations and certifications

According to local realtors DFWMoves, “Texas may not require general contractors to be licensed, but reputable builders often belong to the Texas Association of Home Builders or local affiliates. Look for builders with certifications like Graduate Master Builder from recognized industry associations. Request a list of all homebuyer clients from the past three years for a comprehensive view of the builder’s track record.”

7. Choose your location carefully

“Picking the right location and homesite is paramount when building in Texas,” says Republic Grand Ranch, a land company today offering newly developed acreage for sale near Houston. “Opt for larger lots, ideal for single-story ranch-style homes that are popular in the region. Ensure the site is elevated and not prone to flooding or other weather-related issues. Maintain natural tree coverage for shade and privacy.”

8. Consider offsite construction for your Texas home

“Offsite construction is an ideal solution for building homes in Texas,” states home builders Champion Homes. “Constructing houses in a controlled factory environment shields materials and labor from extreme weather conditions. Select materials suitable for the region, such as engineered wood siding, to withstand Texas’ harsh heat and sunlight.”

Tips for the construction and design phase of your Texas home

9. Use finger-jointed studs for strength and stability

“Texas experiences significant humidity variations between seasons,” informs local family owned business Brookson Builders. “Finger-jointed studs, engineered for strength and stability, combat twisting and bowing caused by humidity changes. Using these studs minimizes common issues like bowed walls or drywall blemishes in Texas homes.”

10. Blend functionality with local charm

“In Texas, it’s crucial to merge functionality with the region’s distinct charm when constructing a custom luxury home,” recommends custom home builder CRV Homes. “Tailor your design to the site’s specific topography and climate. Use locally sourced materials like Texas limestone and native plants for landscaping. Incorporate features like wide eaves, verandas, and energy-efficient windows to combat the intense Texan sunshine and reduce energy consumption.”

11. Don’t overlook landscaping 

Texas’ outdoor spaces are an integral part of the lifestyle, so don’t overlook the importance of landscaping and outdoor design. Work with a landscape architect to create outdoor living areas that complement your home and the local environment. Native plants, irrigation systems, and outdoor lighting can enhance the beauty and functionality of your property. Additionally, consider factors like outdoor kitchens, patios, and pool installations if they align with your lifestyle and budget.

12.Incorporate energy-efficient features

Texas’ climate can be harsh, with scorching summers and high-energy demands. Consider incorporating energy-efficient and sustainable features into your home’s design. This includes options like solar panels, high-efficiency HVAC systems, and smart home technologies. Investing in energy-efficient solutions not only reduces your environmental footprint but also saves you money on long-term utility bills.

13. Secure homeowners insurance home insurance 

Texas is prone to extreme weather events, including hurricanes, floods, and tornadoes. It’s crucial to consider the insurance aspects of your new home. Research and consult with insurance providers in Texas to understand the types of coverage you may need, such as windstorm insurance, flood insurance, and homeowners’ insurance. Ensuring that you have appropriate coverage can provide peace of mind and financial security in the face of unforeseen natural disasters.

Ready to build a home in Texas?

Building a house in Texas is a rewarding venture, but it requires careful planning and collaboration with experienced professionals who understand the intricacies of the state’s construction landscape. By following these insights from Texas builders, you’ll be better prepared to embark on your home construction journey and turn your dream home into a reality.

Source: redfin.com

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Colorado Springs-area home sales fell again last month and prices remained flat as the local housing market continued to feel the effects of spiking mortgage rates.

According to a new Pikes Peak Association of Realtors market trends report that examined home sales last month that took place mostly in the Springs and surrounding El Paso County:

• Single-family home sales totaled 1,067 in August, a nearly 22% decline from the same month last year and the 15th consecutive month that local sales have fallen on a year-over-year basis.

• Homes spent an average of 29 days on the market in August before they sold, an increase from 17 days during the same month last year.

• The median price, or midpoint, of homes that sold in August was $480,000, a 0.1% drop from $480,592 in August 2022. Home prices had increased each month from December 2014 to November 2022, but began to slide late last year and now have declined on a year-over-year basis in eight out of the last nine months.  

• The supply of homes listed for sale totaled 2,420 in August, down 8.3% from the same month last year. On the one hand, August’s listings were the most for any month since November, yet they remained far below pre-Great Recession years, when August inventories often topped 3,000 and 4,000.

The Springs-area housing market, like that of many other cities, has done an about-face since the second half of last year because of higher long-term mortgage rates.

For years, historically low rates in the neighborhood of 3% for a 30-year, fixed-rate loan helped spur a furious demand for single-family homes. That demand, coupled with a shortage of properties for sale, sent Springs-area median home prices soaring over several years; in June 2022, they hit a record high of $495,000.

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After the Federal Reserve began to hike interest rates last year to tamp down surging inflation, mortgage rates rose, too, and roughly doubled to more than 6% for 30-year loans by the end of last year.

That trend of high rates continued through the first several months of this year. In mid-August, long-term mortgages topped 7%; last week, the national average for a 30-year, fixed rate mortgage was 7.18%, according to mortgage buyer Freddie Mac.

Higher rates have priced many homebuyers out of the market and sent sales plunging.

Local real estate agents, however, have said that the demand for homes remains relatively strong. As a result, and combined with tight inventories, prices haven’t plunged, though they are down from their record highs.   

The new home side of the Springs-area housing market also has felt the effects of higher mortgage rates.  

In August, 127 permits were issued for the construction of single-family, detached homes, according to a new Pikes Peak Regional Building Department report. August’s tally was up 15.5% compared with the same month last year.

But the pace of home construction through the first eight months of this year remains well behind the same period in 2022, Regional Building Department figures show. Through August of this year, single-family detached permits totaled 1,655, down 36.4% from 2,604 on a year-over-year basis.

Source: gazette.com

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Payrolls at nondepository mortgage bankers and brokers inched down as spring homebuying ended, according to the latest estimates from the Bureau of Labor Statistics.

The slight drop in representative payroll estimates to 340,000 from a downwardly revised 341,500 the previous month suggests some seasonality has returned to the market.

Spring homebuying this year boosted second-quarter volumes markedly above those seen in the previous fiscal period for the first time in two years, according to a report that Attom, a curator of land, property and real estate data, released Thursday.

The number of mortgages originated rose 21% on a consecutive-quarter basis to 1.56 million but was still 38% lower than a year ago.

“It looks like owners took advantage of the small rate drop to refinance existing loans, while a jump in mortgages for purchasers was likely fueled by a number of forces,” Attom CEO Rob Barber said in the report.

May appears to have been the strongest month for industry hiring this year, when job numbers peaked at an upwardly revised 343,900.

Meanwhile, in broader employment data that the BLS reports with less of a lag than industry estimates, the United States added 187,000 jobs in August as compared to a downwardly revised 157,000 the previous month.

“With the markdowns in the rate of job growth for June and July noted in this report, the cumulative effect is a noticeable slowdown in the job market,” said Mike Fratantoni, chief economist, Mortgage Bankers Association, in a report issued Friday.

Unemployment rose to 3.8% from 3.5%, as more people that left the job market returned to it but found it difficult to obtain work. The annualized rate of wage growth was a little slower at 4.3%.

The rate of wage growth is still likely above the level monetary policymakers would like to see given their 2% inflation target, but other employment numbers might deter further rate hikes, according to Fratantoni.

“This report should be enough for the Fed to keep the federal funds target rate on hold at its next meeting,” he said.

Some relief from rate pressure would be welcome in the mortgage market given a rise in financing costs since spring that’s likely contributed to the dip in industry hiring.

“With mortgage rates near 7%, consumers are feeling the pinch,” said Odeta Kushi, deputy chief economist at First American, in a report issued Friday.

However, there’s still enough household formation in the market to compel builders, who have shown a willingness to make selective price concessions, to provide additional supply.

“Demographic tailwinds from millennials aging into their prime homebuying years and a lack of existing-home inventory means new home construction is essential in meeting shelter demand,” Kushi said.

Residential construction jobs increased by 2,400 in August, Kushi noted.

“You need more hammers at work to build more homes. That’s why residential building jobs are still up more than 10% compared with prepandemic levels, despite the rate environment,” she said.

Source: nationalmortgagenews.com

Apache is functioning normally

Apache is functioning normally

Townhouses offer convenience and amenities that appeal to a range of homebuyers. They’re also growing in popularity, with new townhouse construction up more than 28% from 2020 to 2021. Construction costs also increased during the same time period.

Whether you’re building an investment property or your own new home, determining the project cost is essential before breaking ground. The cost to build townhouses depends on the size, location, number of units, onsite amenities, and the style of the building.

What Is a Townhouse?

A townhouse, also called a townhome, is a type of single-family home that has two or more floors and a shared wall with at least one other home. Compared to different home types, like duplexes and triplexes, each townhouse is individually owned and has its own entrance. Given the high-density design, townhouses tend to be more common in urban and suburban communities.

Townhouses often have their own yard or garage, but may share other communal amenities, such as a pool or tennis court, with neighboring townhouses. These shared facilities are typically governed by a homeowner’s association (HOA), which townhouse owners pay fees to for managing amenities and providing services like landscaping and snow removal.

If choosing between a condo or townhouse, another distinction is that townhomes usually have more autonomy in customizing the exterior of their home and outdoor living space, and more responsibility for that space as well.

First-time homebuyers can
prequalify for a SoFi mortgage loan,
with as little as 3% down.

Recommended: What is a Townhouse?

What Determines the Cost of Building a Townhouse?

The cost to build townhomes depends on a variety of factors. The type of townhouse, size, number of units, location, and additions like garages and basements all contribute to the total construction cost.

Here’s what to consider when estimating how much to build a townhouse.

Type of Townhouse

There are different types of townhouse layouts and configurations, including traditional, stacked, and urban.

•   Traditional: Generally organized in a row with two floors of living space, a basement, and garage.

•   Stacked: Refers to townhouse units stacked in a multi-floor building, which typically have their own entrances.

•   Urban: Similar to traditional townhomes, but often have more modern and spacious floor plans and higher prices.

Another key decision when purchasing a new construction home or townhome is whether to go with a modular or stick-built design. The components of a modular townhome are manufactured off-site, saving time and labor.

Stick-built townhouses are constructed on-site using a wooden frame and finished with a brick or vinyl exterior. This type of construction allows for greater customization, but generally comes at a higher cost than modular townhomes.

Recommended: Pros and Cons of Building a Townhouse

Square Footage

The cost to build a townhouse is impacted by the size, which is measured in square feet.

Townhomes cost between $111 to $125 per square foot on average. Because townhouses share walls and occupy smaller lots, they’re often more affordable than detached single-family new construction, which breaks down to an average of $150 per square foot.

Using the square footage to estimate total townhome cost is a fairly straightforward calculation. For instance, builders can expect to pay between $222,000 and $250,000 to erect a 2,000-square-foot townhouse based on the average range. Bear in mind that does not include the cost of the building site.

With these estimates, you can compare mortgage rates and determine what financing you qualify for.

Number of Rooms

The interior layout, including the number and types of rooms, is a key determining cost factor.

Not all rooms are created equal though, with kitchens and bathrooms being the most expensive due to appliances, tiling, plumbing, and more complex electrical work. The living spaces and bedrooms are generally simpler and cheaper to build.

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Number of Units

By definition, townhouses are built in groups. Leveraging economies of scale to build multiple units or a complex could reduce the cost per unit. Keeping the design and floor plan consistent across units can also lower the price.

So, how much does it cost to build a townhouse complex? That depends on the extent of amenities included, as well as the number of units.

Location

Location, location, location. Where you choose to build a townhouse will impact the cost of construction and its value once completed.

The cost of labor varies significantly between regions. Paying builders and contractors typically accounts for 40% of new home construction expenditures. The location of the townhouse also matters in terms of costs related to accessing the site and sourcing materials.

Additions

Wondering how much to build townhomes with attractive amenities? Here’s what you can expect to pay for common townhome add-ons.

•   Basement: Building a basement foundation costs between $24,000 and $44,500 on average.

•   Driveway: The materials and installation costs for a new driveway range from $2 to $15 per square foot depending on the material used.

•   Fencing: More affordable fence materials like wood, vinyl, and composite range from $10 to $45 per linear foot.

•   Garage: Cost varies by size, with one-car garages ranging from $10,500 to $27,000 and double garages costing between $14,500 and $40,300.

•   Pool: Expect to pay between $28,000 and $66,500 for an in-ground pool, with vinyl and fiber-glass lining typically costing less than concrete.

•   Shed: Adding a storage shed ranges from $300 to $15,000, with pre-fabricated options usually costing less than custom builds.

💡 Quick Tip: Your parents or grandparents probably got mortgages for 30 years. But these days, you can get them for 20, 15, or 10 years — and pay less interest over the life of the loan.

Construction Cost for Building a Townhouse

Construction costs are often the deciding factor when thinking of buying or building a house. Townhouses are generally less expensive to build per unit than a detached single-family home.

In addition to the factors discussed above, townhouse construction involves a range of pre-construction costs, like purchasing land, building permits, and architectural or design fees. The materials and labor usually account for the majority of the expenses to build a townhouse.

Townhouses can be designed as starter homes or luxury properties, and project budgets can be structured according to the target market and expected return on investment. Still wading into the waters of homebuying? Consult a Home Loan Help Center for useful tips and guides to master the basics.

Recommended: Construction Loans for Building a House

The Takeaway

How much does it cost to build a townhouse? In short, it depends on the type of townhouse, size, number of units, location, and added amenities. But you can estimate roughly $111 to $125 per square foot or $225,000+ for a 2,000 square-foot abode, not including land cost.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% – 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It’s online, with access to one-on-one help.

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FAQ

How many townhouses can fit on an acre?

The number of townhomes that can fit on an acre will depend on what’s permitted by local zoning, as well as space allocated for landscaping, parking, and other amenities. However, an acre can accommodate around 20 two- or three-story townhomes.

How much are utilities in a townhouse?

Utility costs vary by location, unit size, personal energy use, and equipment used for heating and cooling. Due to their smaller footprint, townhomes typically have lower utility bills than single-family homes.

Should I buy a townhouse or single-family home?

There are pros and cons with either type of home. Townhomes may require less maintenance and include extra amenities, while single-family homes can offer more space and discretion in how you design and decorate your home’s exterior.

What are the disadvantages of living in a townhouse?

Living in a townhouse can mean less privacy from your neighbors and noise from shared walls.

Photo credit: iStock/vkyryl

*SoFi requires PMI for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Minimum down payment varies by loan type.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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Source: sofi.com

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The housing market is springing back—or is it?

Home sales soared in the spring and early summer months this year, but suddenly slowed in mid-summer. After that, sales in August fell for the second straight month, reaching the second-lowest pace of 2016.

They ended the month less than one percentage point higher that they were a year ago.

What’s the reason for the drop?

Observers list some reasons for the slower market, beginning with higher prices. Prices have risen 40 percent over the past three years, pushing many homes beyond the reach of buyers.

Among often-cited causes are the difficulties many buyers have had qualifying for mortgages in recent years. The fact is, though the approval rates for mortgages to buy homes are 50 percent higher than they were four years ago.

Currently, mortgage rates also remain at historically low levels, which makes homes less expensive than they would be otherwise for buyers using mortgages.

The housing supply may be the true culprit

The primary cause may simply be that there just aren’t enough homes for sale to meet demand.

“Hopes of a meaningful sales breakthrough as a result of this summer’s historically low mortgage rates failed to materialize because supply and affordability restrictions continue to keep too many would-be buyers on the sidelines,” said Lawrence Yun, chief economist for the National Association of Realtors.

The supply of homes for sale has been tight for the past three years and now is shrinking even faster. Total housing inventory at the end of August fell 3.3 percent to 2.04 million homes for sale, and is now 10.1 percent lower than a year ago (2.27 million).

Unsold inventory is a 4.6-month supply at the current sales pace, which is down from 4.7 months in July. Inventories in hotter markets and lower price tiers more popular with first-time buyers are twice as low as the industry average.

What is the solution?

“It is very concerning to see that inventory conditions not only show no signs of improving but have worsened in recent months from their already suppressed levels a year ago,” said Yun. “While recent data from the U.S. Census Bureau (link is external) shows that household incomes rose strongly last year, home prices are still outpacing incomes in many metro areas because of the persistent shortage of new and existing homes for sale. Without more supply, the U.S. homeownership rate will remain near 50-year lows.”

Yun has advocated stepped up new home construction to relieve the chronic shortages, but home production fell in August, and many builders are encountering shortages of skilled tradesmen, materials, and sites available for new construction.

Source: totalmortgage.com

Apache is functioning normally

Builders have addressed their inability to keep up with demand for new homes, saying there simply aren’t enough workers to build them.

Building firms point out there are around 250,000 unfilled construction jobs in the U.S. today, including positions for home framers, electricians, masons, carpenters and others. This shortage of workers means that new home construction is being held back.

“It takes me twice as long now to do an estimate as it used to,” Jason Scott, owner of North Star Premier Custom Homes in Westlake, Ohio, told realtor.com. He reckons that he now has to wait an average of 8 to 10 weeks in order to procure workers for his projects, whereas before it would take just a single day. Unfortunately Scott is not alone, as many builders face similar recruitment problems, the National Association of Home Builders said.

“We’ve got rising housing demand at the same time that the residential construction industry lacks workers,” said Robert Dietz, the NAHB’s chief economist.

Dietz said that builders expect to complete around 900,000 new single-family homes this year, which is far below the 1.2 million needed to keep pace with buyer demand.

Builders are being blamed for not building more homes amid an intense shortage of housing inventory across the nation. Economists say that the lack of new homes is also to blame for rising home prices across the country.

But the builders say the lack of workers means higher costs, with subcontractors taking advantage of the situation to increase their prices by around 10 percent this year alone, Scott said. He told realtor.com that he’s now paying double for framing workers compared to what they were receiving a decade ago.

“I know builders who haven’t factored these [workers’ pay] increases in, and they’re watching $10,000 to $15,000 come off their bottom line,” Scott said.

The construction industry saw thousands of workers leave during the last housing crisis and many of those have not returned. Things have been complicated further by a decline in vocational education courses, which means fewer young people are pursuing a career in trades.

Some organizations are stepping in to train more workers for construction. The Home Builders Association in Colorado Springs, Colo., for example, has partnered with a local school district to start a vocational program, Careers in Construction, in six schools. Home Depot recently pledged $50 million to the Home Builders Institute, an educational trade group, to support a Pre-Apprenticeship Certificate Training program in schools and on military bases.

“The worker shortage is severe,” Dietz said. “The industry is going to have to recruit the next generation of construction workers—or we’ll continue to underbuild houses, there won’t be enough houses, and home prices will continue to rise faster than incomes.”

Mike Wheatley is the senior editor at Realty Biz News. Got a real estate related news article you wish to share, contact Mike at [email protected].
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Source: realtybiznews.com