According to a Gallup poll, more people want homeownership and more people intend to buy homes, especially in the next five years. Many of them want new homes. For one, people in existing homes are staying in them longer and longer, and they're not planning to sell. Secondly, new homes are better, safer, higher performing, and give an experience an already-lived-in home can not match.
Labor is a No. 1 risk area for new home construction. The men and women who run home building companies worry that, on any given day on their job sites, a competitive, deeper-pocketed organization can show up on that site and offer laborers there $1,000 dollars to drop what they're doing and come over to the competitor's job. They also worry, especially in states like Texas, that federal, state, and local policies squeezing undocumented workers in the United States illegally, are adding to the labor crisis.
One executive whose operations are entirely Texas-based called out brand new state legislation, SB-4, signed off this past Sunday by Texas Governor Greg Abbott, banning sanctuary cities in Texas."It's going to get harder to find workers for our jobs now. They're going to start going into hiding," the Texas home building operator told me. He said that recently compiled data shared among builders shows a shortage of 20,000 workers in the Dallas-Fort Worth market alone, and that estimates of the impact of this shortage on new home prices in the market are an eye-popping $100,000 per home."Multiply that cost impact on all the new home starts in the country," he says. "It's mind-boggling that they're going down this path right now."
This is a real worry for builders right now. It's not that builders have their heads in the sand about the need for improved operations and productivity tools, more technology, automation, and data-enabled process management. They're aware of the need for transformation in their home construction models, especially on scaled projects.