National Housing Market Outlook

Why Frame Walls When You Can Frack Wells?

Rick_Palacios_Jr_web

Rick Palacios Jr

October 2, 2014

In late 2008, oil and gas pipeline construction workers earned $0.46 per hour more than new home framing contractors. Today, they earn $8.15 more per hour. It’s no wonder labor is tight in the new home market, especially in Texas and Denver, the closest major markets to North Dakota. Since 2008, framing contractor wages have fallen 8%, while oil and gas pipeline construction wages have swelled by 20%.

Source: John Burns Real Estate Consulting, LLC; BLS (July 2014)

Since the end of 2007, oil and gas construction grew by 223,000 jobs, while residential construction employment fell by 743,000 jobs. That still means that there are at least 500,000 former construction workers not in the oil industry who need to be enticed to return to the residential construction market. Touring the Washington, DC, Charlotte, Atlanta, Austin, and Phoenix housing markets recently, the triple-digit thermometer readings reminded me just how difficult home construction can be. We will be watching the inevitable wage increases carefully, as rising wages will have the additional impact of reducing the price home builders will pay for land.

Source: John Burns Real Estate Consulting, LLC; BLS (July 2014)

Note: We are defining energy sector and residential construction as follows: Energy sector = oil and gas pipeline construction + oil and gas extraction + support activities for oil and gas operations Residential construction = residential building construction + residential specialty trade contractors

Building Market Intelligence™

Every week, we deliver analysis to over 40,000 subscribers with our Building Market Intelligence™ newsletter. Subscribe to our weekly BMI newsletters to stay current on pressing topics in the housing industry.

About The Author

Rick Palacios Jr
Managing Principal, Director of Research
Rick oversees and guides JBREC’s research platform while coaching his team daily.

Contact Us

If you have any questions about our services or if you would like to speak to one of our experts about we can help your business, please contact Client Relations at clientservices@jbrec.com.

Products and Services Mentioned

Research Membership

Our research services enable our clients to gauge housing market conditions and better align their business and strategic investments in the housing industry. We provide a thoughtful and unique holistic approach of both quantitative and qualitative analysis to help clients make informed housing investment decisions.

Burns Building Product Industry Analysis and Forecast

A report that offers actionable analysis and accurate forecasts for building product sector trends, including industry drivers for both residential repair and remodeling spending and new home construction activity.

Real Estate Consulting

Our experienced team of consultants helps clients make sound housing investment decisions. We thrive on their success and work with many clients over multiple years and numerous projects. ​

Latest Insights

What’s happening with hiring? Listen to these 4 recruiting firms.
Earth, Wind, and Fire: NileBuilt Homes Defy the Elements
Design Disruption: Architects’ Floor Plan Forecasts