Builder Jobs Are Still Slow Despite Construction Boom

Adam Gregor - Fotolia

WE’RE HEARING that it’s kind of a mystery as to why the number of construction jobs has not kept pace with housing starts.

The National Association of Home Builders estimates that it takes 1.5 years in worker time to construct a single-family home.

With housing starts up nearly 100,000 over the past year, that should translate into 150,000 new jobs. 

But homebuilders have taken on less than 100,000 new hires.

And builders complain that they can't find enough skilled workers.

Friday's job report showed hiring by residential builders fell to 5,100 in June from 5,500 in May. March was fairly strong with 13,800 new hires.

Meanwhile, 8.2 million people are working part time while they continue to look for full-time work. And 4.3 million people have been jobless for 27 weeks or more.

NAHB chief economist David Crowe noted that unemployment is highest in the Northeast and Midwest where there is not much demand for construction labor.

Meanwhile, the hottest markets for new home sales are in the Southwest and four of those markets are in Texas. Houston led the country with 14,400 in new home sales over the past 12 months ending in March, according to CoreLogic. Phoenix, Dallas, Atlanta, San Antonio and Austin rounded out the top six markets.

So it may be a mismatch in terms of where the demand for new homes is and where the slack labor is. In the past, it was easier to pick up and move to where the jobs are.

But this was a very slow recovery and many construction workers had to look for other jobs. Negative equity also makes it difficult to sell a home and move.

Meanwhile, existing construction workers are working full time with plenty of overtime.

“Builders are working their crews harder but they would prefer to increase their hiring,” Crowe said.

BLOG OF THE WEEK: Those of us bound to heavy work desks always feel our burdens are lighter if we hear about somebody else’s vacation. So Garth Graham’s ruminations on his family cruise funfest got turned into a blog we called “Cruisin’ for a Mortgage Bruisin.’” Now, Garth wasn’t totally shameless. He made his exploits with drink tickets and other Tom Cruise-like events into parables that could be used to benefit any hardworking mortgage operation. No, here’s the shameless part. He described the outrageous cost of working several hours a day on rented electronica from the boat (it may have been named the “Z Tranche”). This after telling us he couldn’t do last week’s blog due to being out of pocket on a cruise! There’s a word for this in journalism, and it is this: Busted!

MOST READ/EMAILED: This week’s most read content was Brian Collins’ piece on rising interest rates. Are refinancings dead? Will renters be unable to step up to ownership because of rising costs? We’ll see. The most emailed content of the week was also Brian’s. It concerned that topic that hits closest to home for all mortgage bankers: warehouse lines. No money, no lending, so if the Feds are going to make it harder to get, that’s very hard cheese indeed.

SHOUT OUT: We typically give a shout out to companies that hire more than ten people, feeling this is the way to get the industry and the general economy out of its doldrums. But while the national numbers were robust, the mortgage industry took a step backward and shed 800 jobs. (The mortgage numbers, by the way, lag the national numbers by a month.) So, no shout out today.

WHAT’S WRONG WITH THESE PEOPLE?: We have made gentle fun of many a thread at our ultra-lively MortgageGrapevine.com. But some things just aren’t funny. Last week we reported the skirmishing, in good fun, over who was “King of the Vine.” And that carried over into this week as well. But the follow-up thread is appalling reading (we won’t link to it here because it is filthy, blasphemous and brain dead). Shouldn’t you folks be trying to close loans instead of flaming each other and everyone in creation? What a waste of pixels.

Mark Fogarty is editorial director of the SourceMedia Mortgage Group and has been commenting on the mortgage market since 1984. Brian Collins is the group’s senior editor and D.C. bureau chief. He has worked the mortgage beat since 1988.