The building industry's accelerated recovery in early 2013 has slowed, cutting into gains that led some economists to predict an imminent return to historic norms. Several factors are putting the brakes on construction generally and homebuilding specifically, including...

...There Are No Jobs For Builders

Construction employment totaled about 5.8 million jobs in August, matching July's amount, and has been effectively flat since March 2013. "The recent leveling-off of construction hiring means the industry risks losing more experienced workers, setting up a potentially grave shortfall when demand for construction resumes," said Ken Simonson, Associated General Contractors of America (AGC) chief economist.

An August AGC survey found that 74 percent of construction firms are having trouble finding qualified workers, from skilled labor like carpenters and equipment operators to professional positions like engineers, estimators and project supervisors. "Many firms "?(R)? expect construction labor shortages will only get worse," said Stephen Sandherr, the AGC's chief executive officer.

...And Nowhere to Build

An NAHB survey in August found 59 percent of homebuilders reporting a low or very low supply of finished, build-ready lots in their markets. The response was the largest the NAHB had seen since the question's inception in 1997.

A New Housing Bubble?

In April, the National Association of Realtors' (NAR) home price affordability index fell below its long-term trend line, where it has remained through July. Sustained below-trend data is a strong indicator that the housing market has entered a new bubble. Price increases, especially for existing homes, are a major cause; in August, the median price increased 14.7 percent year-over-year, the 18th consecutive month of YoY price growth and the ninth consecutive month of double-digit YoY rate increases.