New Construction Hampered by Labor Shortage:

Existing Home Sales have been on a tear, and would be even higher if it were not for inventory shortages.  New Homes are also facing headwinds from a shortage - a labor shortage.

Builders claim there is good demand, but they complain they're handcuffed by a lack of skilled labor to build new homes. The builders' industry trade group calls the incidence of labor shortages nationwide "surprisingly high."

"In fact, the 9-trade shortage is now substantially higher than it was at the peak of the 2004-2005 boom, when annual starts were averaging around 2 million, compared to current rates of about one million," economist Paul Emrath of the National Association of Home Builders wrote in a recent report. Nine-trade refers to the various skills required for home building, such as concrete pouring and carpentry.

"The last time builder-reported labor shortages were as widespread as now was just before 2001 during a prolonged period of strong GDP growth with overall unemployment as low as 4 percent," he added.

Unemployment in the construction industry fell in June to the lowest level since 2001, according to an analysis by the Associated General Contractors of America. That's because contractors are having a hard time finding enough qualified workers to meet growing demand, association officials said.

"Expanding job opportunities throughout the economy make it increasingly difficult for contractors to find experienced construction workers," said Ken Simonson, the association's chief economist. "This scarcity shows up in record workweeks for craft workers and flattening of employment totals despite higher construction spending."