We all know especially in and around Houston home prices has been going up every month for the last few years. There are many things driving this price increase including high influx of people moving to Texas, less inventory, high demand for homes and less supply of labor. Out of all, labor shortages seems to have major impact. A June 2014 survey from the National Association of Home Builders shows that the industry is facing shortages of labor and subcontractors that have become “substantially more widespread since 2013.” Shortages are particularly notable for basic skills like carpentry and framing, the NAHB notes.The real estate industry has called for home builders to ramp up construction to meet inventory shortages. Home builders increasingly are facing significant labor shortages that is making it more difficult to complete projects, a new study shows.



Forty-six percent of builders reported a shortage of labor in 2014, the highest shortage reported since 2000 and slightly higher than at the peak of the housing boom in 2004 and 2005, when the United States was averaging about 2 million housing starts a year, the NAHB notes in its report. As of July 9th, annual housing starts remain mostly under 1 million. New-home construction has only partially recovered from its 2008 downturn and labor shortages are persisting despite relative slowdown in activity compared to previous years, the NAHB notes. Builders say a shortage of subcontractors is raising their costs. On average, builders said their direct labor costs on the same house rose by 2.9 percent, while subcontractor costs grew by 3.8 percent.

Three out of five builders say the labor shortages have caused them to pay higher wages or subcontractor bids (65%); raise home prices (62%); and created difficulty in completing projects on time (60%). Thirty-six percent of builders said the labor shortages were making some projects unprofitable, and 18 percent of builders reported having to even turn down some projects.Click here to read the full report.

If you are comparing the new home prices from last year to this year, in Woodlands, Sugar land and Katy area they have gone almost 5-10%. You might decide to stay away from the market which you did it in the first place and now the prices have gone up so much. No one can predict where it’s going to stop so it’s tough to time the market. You just have to decide whether you can afford a good quality house in good neighborhood and go for it since the rates are so low. Don’t keep waiting and lose the boat again!!!

About Vijaianand Thirnageswaram

I am a Proud Realtor of Texas, trying to guide and help clients to find their dream home and educate them to buy them for right price. I am also a Candidate for CFP who has more financial knowledge which allows me share and educate clients in any financial decision making process.

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