NAHB Study Highlights the Economic Impact of Labor Shortage

Washington, DC, June 11, 2025-A landmark study released from the Home Builders Institute (HBI), in collaboration with the National Association of Home Builders (NAHB), examines 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 to provide a comprehensive view of the far-reaching implications of this critical workforce challenge.

The skilled labor shortage in the home building sector presents a profound challenge that significantly impacts the production of new homes. As home builders face higher construction costs and prolonged building times, the supply of new homes dwindles, exacerbating the housing affordability crisis and hindering economic growth.

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.