Wages for residential construction workers have risen sharply in recent months, increasing costs that builders could be passing on to buyers of new homes, at least temporarily.
The average hourly earnings for residential workers was $33.51 in September, up 9.9% from a year earlier, according to Bureau of Labor Statistics data analyzed by the National Association of Home Builders.
The September jump followed a 10.8% gain in August. In fact, year-over-year construction wage growth rates in the past four months are unprecedented for the data series that dates to 1990, the homebuilders trade group noted.
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"The ongoing skilled labor shortage in the construction labor market and lingering inflation impacts account for the recent acceleration in wage growth," NAHB economist Jing Fu wrote in a blog post.
Wages for construction workers have increased recently, but the trend likely is not sustainable, according to Ken Johnson, an economist and the Walker family chair of real estate at the University of Mississippi. Though homebuyers ultimately will pay higher prices based on residential construction workers' larger wage increases, those gains almost certainly will level out, Johnson noted in an interview.
"It is very cyclical," he said. "They're winning right now, but they might well be losing next year."
