High mortgage rates are not the only factor keeping homeownership out of reach for many Americans. Behind the scenes, homebuilders are contending with a persistent shortage of skilled workers that is slowing construction timelines and exacerbating the nation’s housing deficit.
Industry leaders say the labor gap is creating a ripple effect across the market, delaying projects, increasing construction costs, and limiting the number of new homes entering the market at a time when demand continues to outstrip supply.
“Labor is one of the largest and most expensive inputs when it comes to home production and land development,” said Jim Tobin, president and CEO of the National Association of Home Builders (NAHB). He noted that the construction industry faces a shortfall of approximately 250,000 workers every month, a figure that has peaked as high as 400,000 during periods of peak activity.
NAHB estimates government regulations add nearly $132,000 to the price of a typical new home. (Matthew Busch/Bloomberg/Getty Images / Getty Images)
The industry’s labor requirements are projected to grow significantly in the coming years. A recent report from the Home Builders Institute (HBI) and NAHB estimates that builders will need roughly 723,000 new workers annually to meet demand and help close the nation’s estimated 1.5 million-home housing gap.
Housing industry leaders say states that have prioritized homebuilding have been better positioned to accommodate population growth and economic expansion. (David Paul Morris/Bloomberg via Getty Images / Getty Images)
The shortage is already extending construction timelines and driving up costs. According to HBI President and CEO Ed Brady, labor constraints add nearly two extra months to building schedules, inflating expenses and delaying delivery.
“This shortage adds nearly two extra months to building timelines, inflating costs and delaying delivery,” Brady said.
While replenishing the skilled trades pipeline is essential, builders emphasize it is only part of the solution. Tobin noted that many construction careers offer stable, middle-class incomes without requiring a four-year college degree, yet the industry has struggled for years to attract enough talent to replace retiring tradespeople.
An “Open House” sign in front of a home for sale in the Woodland Hills neighborhood of Los Angeles, California on July 13, 2025. (Eric Thayer/Bloomberg/Getty Images / Getty Images)
