This Empty Picnic Table Represents One Of The Few Problems In The US Housing Market Today

The U.S. housing market is one of the few bright spots in the global economy.

However, it could be doing better, especially in the market for new homes.

“One head-scratcher many of our clients have been struggling to understand is the delay between starts and completions,” writes Lisa Marquis Jackson of John Burns Real Estate Consulting.

Here’s a table that shows just how much completions are lagging starts:

growth by region

Photo: John Burns Real Estate Consulting

According to Jackson’s analysis, one of the main reasons causing this is lack of labour.

“An early morning drive past a day labour staging area underscores the point dramatically-the once-bustling construction employment sector is running very lean on labour,” writes Jackson.

Here’s a photo Jackson allowed Business Insider to publish:

laborer hiring area

Photo: John Burns Real Estate Consulting

Jackson notes that these areas are typically filled by workers from south of the border.  Here’s some of her commentary:

Housing is heavily dependent on Hispanic labour and migration to the US from Mexico has slowed dramatically. This is due in part to a stronger Mexican economy, new US immigration restrictions and even the shift into higher-paying jobs in less volatile sectors, like energy and transportation. Add to that the fact that building a house is really hard work.

US Mexico

Photo: John Burns Real Estate Consulting

So, what does all of this mean?

Jackson doesn’t expect workers to come rushing back to this sector anytime soon.  As a result, builders are going to have to incur higher labour costs.

From John Burns Real Estate Consulting.

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