Residential construction industry faces increasing labor shortage
A recent NAHB survey found that immigration enforcement and competition from data center construction are siphoning off qualified housing-trade workers.
Even as builders remain cautious about adding inventory to a sluggish residential market, the industry is contending with a labor shortage that's becoming more widespread.
A recent survey by the National Association of Home Builders (NAHB) found that more than half of the 415 respondents reported "some" or "serious" shortages in five housing-related trades: framing crews, rough carpentry, finished carpentry, masons and concrete workers. A significant number of builders also reported shortages in trades including drywall workers (49%), plumbers (47%) and electricians (47%).
Fewer projects, more shortages: The September labor availability survey indicated that across the nine trades the NAHB has been monitoring since 1996, shortages were reported by 47% of respondents. That's up from 42% in April 2025, and higher than at any time during the housing boom of 2004-2006, when annualized housing starts were in the 1.8 million range. This year, the pace of seasonally adjusted annualized starts has been around 1.3 million.
Contributing factors: Labor shortages in the housing trades have become more widespread in the past 18 months, according to the analysis by Paul Emrath, NAHB's vice president for housing policy research.
Several factors are involved, including increased competition from other parts of the industry — most notably the recent surge in data center construction — and the federal government's stepped-up immigration enforcement efforts, Emrath noted.
The broader impact of immigration policy: Builders have reported that some legal workers are also staying away from job sites due to fears of being swept up in immigration raids, which is weighing on builders' confidence in completing projects.
The NAHB has been in contact with senior officials at the Department of Homeland Security and Immigration and Customs Enforcement (ICE), voicing concerns about inconsistent and aggressive law enforcement tactics targeting residential construction workers.
The trade organization also filed an amicus brief in a Fifth Circuit immigration case about the importance of fair and consistent due process for those detained.