Home builders are reporting wider labor shortages than they did at the height of the 2004-06 housing boom, and they’re building about 500,000 fewer homes a year than they did then. That gap says the shortage isn’t being driven by volume. Builders are short of workers even at today’s slower pace.
The National Association of Home Builders asked about 16 trades in its September Housing Market Index survey, run with Wells Fargo. NAHB economist Paul Emrath published the results Oct. 14. Across the nine trades NAHB has tracked the same way since 1996, an average of 47% of builders reported some or serious shortages of workers they employ directly. That’s up from 42% in April 2025.
Builder labor shortages versus the 2004-06 boom
The comparison is what makes this reading stand out. During the boom, starts ran above 1.8 million a year, and builders still never reported a nine-trade average this high. In August, starts were running below a 1.3 million annual rate.
The path matters too. Shortages peaked after COVID, eased from 2022 through 2025, and have now turned back up. That reversal came without a housing rebound to explain it. Builders say demand from other construction, especially data center work, is pulling from the same trades.
Where the construction labor shortage is worst
Shortage rates ran from 33% for excavators and building maintenance managers to 58% for finished carpentry. The biggest moves since April 2025, per NAHB:
- Framing crews: 57%, up 9 points
- Landscaping workers: 39%, up 7 points
- Roofers: 36%, up 6 points
- Plumbers and HVAC: 45% and 43%, both unchanged
Most of the other trades rose a little. The mechanical trades holding flat is worth a second look. Plumbers and HVAC techs have been tight for years, and builders seem to have adjusted. The structural and exterior trades are the ones getting worse.
What builders say it’s costing them
Builders reported that the median labor cost for the same house rose 4.2% over the past 12 months. That’s the direct price of a thin bench, and it lands before anyone counts the cost of a slower schedule.
Subs don’t offer a way around it. NAHB found subcontractor shortages now closely track shortages of direct hires. More than half of builders reported both for framers, rough and finished carpenters, bricklayers and concrete workers. A builder that can’t hire a framer can’t easily buy one from a framing sub either.
Commercial contractors are seeing the same squeeze. In Bridgit’s survey, 98% of big contractors now weigh crew availability in their bids, up from 60% a year earlier.
Why the home building labor data matters for schedules
A short crew doesn’t show up in a jobs report right away. It shows up in cycle times. September’s federal numbers already had residential specialty contractors cutting 7,900 jobs while overall construction employment rose. Fewer framers on fewer starts isn’t a sign the market has found balance.
The practical takeaway for builders and lenders is in the framing number. Framing sets the pace for everything that follows on a house, and it’s the trade that moved most. If NAHB’s next labor reading shows framing shortages still climbing while starts stay flat, expect longer build times and another round of labor costs running ahead of the 4.2% builders just reported.