How a construction shortage is fueling the cost of housing in Idaho
IDAHO FALLS, Idaho (KIFI) — A national construction worker shortage is one of several factors behind Idaho's rapid increase in housing costs, alongside the growing population and higher interest rates.
"A lack of skilled construction labor is a key limiting factor for improving housing inventory and housing affordability," according to the HBI Home Labor Market Report from 2023.
The report also shows while higher interest rates have significantly slowed the wave of new home construction, it doesn't necessarily mean construction demand is on a downward trend.
"As the housing industry approaches a turning and return to expanding construction volumes, labor demand will grow. Consequently, the nation will require additional construction workers to reduce the existing housing deficit of approximately one and a half million homes."
It's not just affecting new home construction either. According to a 2023 report by Harvard University on The State of the Nation's Housing, the average age of homes is on the rise. Several homes on the market in Idaho are older and in need of repairs to remain habitable.
"In 2021, the age of the median home hit 43 years, up from 27 years in 1991, and 9.5 million homes (6.7%) had structural deficiencies or lacked basic features like plumbing, electricity, water, and heat."
That reflects in the current construction climate, which shows demand for smaller home renovation projects over complete new builds.
While construction wages in Idaho are low when compared to other states, they have seen an 11.4% increase over the years, putting the average hourly wage just above $30.
