The residential building sector continues to grapple with a persistent skilled labor shortage, fueling rapid wage increases. According to the Bureau of Labor Statistics, average hourly earnings for residential building workers jumped to $32.28 in June 2024, a year-over-year growth rate unseen since December 2018.

This surge in wages places residential building workers at a premium compared to other industries. Their average hourly earnings surpassed those in manufacturing by 16.2% and outpaced transportation and warehousing by 10.6%. However, the sector still lags behind the lucrative mining and logging industry by 11.1%.

Despite these robust wage gains, headwinds are emerging. The number of open construction jobs declined notably to 295,000 in June, signaling a potential cooling of labor demand as interest rates remain elevated. Nonetheless, the industry's ongoing skilled labor shortage remains a formidable challenge.

As NAHB Economist Jing Fu noted in the Eye on Housing blog, these trends underscore the complex dynamics at play in the residential construction market.