Housing shortages continue to hold back home sales, keep Millennials from entering the housing market and even decrease affordability.
Many different factors explain the lack of new homes coming on to the market, but the latest challenge could be the ongoing opioid crisis, according to an article by Anora Gaudiano for MarketWatch.
(Source: Alcynna Lloyd)
At this point, the crisis has gotten so bad that more than 115 people die in the U.S. every day from overdosing on opioids, according to the National Institute on Drug Abuse. The misuse of, and addiction to, opioids includes prescription pain relievers, heroin, and synthetic opioids such as fentanyl.
Currently, the number of people working or looking to work remains at 62.7%, a 40-year low. Now, Jeff Korzenik, Fifth Third Bank chief investment advisor said opioids could be at the heart of the problem, according to the MarketWatch article.
From the article:
For Korzenik, the reason for this shortage is clear. “The opioid epidemic is preventing a huge portion of the population that is sidelined from joining the labor force because labor intensive jobs are also the ones that require workers who can pass drug tests,” he said in an interview with MarketWatch.
A study back in 2016 showed that about 6 million people between the ages of 25 and 54 are not participating in the work force, and about half of those were taking pain medication. Of those, Korzenik estimated that about 1.4 million could be working but aren’t due to opioid addiction or criminal records regarding previous abuse of the drug.
This comes at a time when the housing industry is already fighting over limited levels of construction labor. In fact, in some areas, labor shortages are so bad that construction companies that can pay more are offering workers $2, $3 or even $4 more per hour to walk off the lot at the workers’ current job and go work for their company.
Of course, the opioid crisis isn’t the only factor causing a labor shortage in the construction industry. Once the Great Recession began, many immigrants who had been in the U.S. working in the construction field either left the industry, or left the country entirely to go back to their home countries.
Now, although the housing industry has recovered and the construction industry is once again in need of more laborers, the immigrants never returned.
Of course, other factors are also affecting the housing shortage, such as current homeowners not wanting to sell their home due to fears of being able to find a new home, thus continuing the cycle of low housing inventory.
