The Wall Street Journal's Kris Hudson and Jeffrey Sparshott look at the lingering labor malaise that continues to frustrate builders, as the supply of available workers falls far short of the demand for new houses.

While residential construction spending climbed over $36 billion in August--to reach it's highest point since October 2007--there were more than 676,500 fewer workers in the residential construction industry compared to eight years ago.

And that has led to big delays, which, combined with higher labor costs and concessions to buyers, adds up to a slimmer bottom line:

“Eventually, the higher costs, if we want these projects to go forward faster, are going to mean passing on the costs” to buyers, said Bernard Markstein, president of Markstein Advisors and a construction-industry consultant. That could price out some buyers.

Seventy-four builders surveyed in September by industry tracker John Burns Real Estate Consulting Inc. have reported slowdowns as long as two months ...  Texas builder CastleRock Communities LP now needs an average of 155 days to complete a house, up from its historical average of about 115 days.

“Our flooring contractors are having a hard time finding enough guys to lay tile,” said Lance Wright, a partner in CastleRock. “Plumbing is three weeks out. Everything that used to be a three- to five-day lead time is now three weeks to 30 days out.


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