Wednesday, September 7, 2016

Bonddad's Wednesday Linkfest

I'm a financial adviser with Thompson Creek Wealth as well as a tax and business attorney with The Law Office of Hale Stewart.

ISM Services Drops But is Still Positive

Homebuilders Are Facing a Construction Labor Shortage

Eight years after the housing bust drove an estimated 30 percent of construction workers into new fields, homebuilders across the country are struggling to find workers at all levels of experience, according to the National Association of Homebuilders. The association estimates that there are approximately 200,000 unfilled construction jobs in the U.S. - a jump of 81 percent in the last two years.

The ratio of construction job openings to hiring, as measured by the Department of Labor, is at its highest level since 2007.

"The labor shortage is getting worse as demand is getting stronger," said John Courson, chief executive of the Home Builders Institute, a national nonprofit that trains workers in the construction field.

The impact is two-fold. Without enough workers, residential construction is trailing demand for homes, dampening the overall economy.

And with labor costs rising, homebuilders are building more expensive homes to maintain their margins, which means they are abandoning the starter home market. That has left entry-level homes in tight supply, shutting out may would-be buyers at a time when mortgage rates are near historic lows.

Chart of Total Construction Employees

Chart of New Home Sales

Financials Margins of the 20 Largest Homebuilders by Market Capitalization

Only 2 Mid-Cap Dividend Aristocrats (Mid-Cap Stocks That Have Increased Dividends for 25+ years) Have Outperformed the SPYs over the Last 10 Weeks