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Why the housing shortage is set to get even worse

Construction worker shortage

It's summer, which means home building should be heating up.

But in many parts of the country, construction activity isn't growing as fast as it could be -- thanks to a lack of workers.

The construction industry's unemployment rate is at a record low. It was at 5.3 percent in May -- the second-lowest rate since May 2000, according to Associated Builders and Contractors (ABC), an industry trade group.

And it's significantly lower in certain states. In Vermont, unemployment among construction workers is just 1.5 percent. It's between 2.2 and 2.5 percent in Iowa, Idaho, Colorado, Indiana and North Dakota.

While that's great news for workers, it makes new buildings more expensive to construct and has the potential to slow down the creation of new housing precisely as the need for it increases.

"It's driving up costs, for homebuilders and providers of nonresidential services," said Anirban Basu, chief economist for ABC. "The shortages are even greater in non-residential construction -- everything besides the places in which we live."

Paradoxically, part of that shortage stems from the Great Recession that followed the 2007 housing crash. "During the financial crisis, the construction industry shed about 2 million jobs," Basu said. Many of those workers left the field permanently: an estimated 30 percent of construction workers went into other industries, according to Reuters.

The number of people working in construction is still below what it was in 2007. Source: Bureau of Labor Statistics

"Construction contractors can't find welders, can't find electricians, can't find air conditioning specialists," Basu said.

In California, the count could grow to more than 200,000 workers needed by 2024, Erin Volk, of the Associated General Contractors of California, told CBS13.

"We're looking for all types of people with all types of skill sets," she said.

While there's not much evidence that the White House's anti-immigration rhetoric has had an impact on the industry, it does not bode well for the worker pipeline. Almost one-third of the construction workforce is foreign-born; undocumented immigrants make up about 14 percent of the industry, according to the Pew Research Center.

And many more people will be needed to replace those leaving. According to Volk, for every five experienced workers who retire from construction, only one new apprentice enters it. 

Meanwhile, with fewer workers to build houses, existing homes are practically flying off the lot, with the typical house going under contract in less than a month. Frustrated would-be homeowners might want to consider picking up a hammer and building their own.