Earlier this week, Bloomberg reported that pending home sales in the US had dropped to their lowest level in three years. That coincided with a sharp drop in construction of new homes, which plummeted to the lowest level in over three and a half years in July — two signs that things are not so sunny for the country’s housing market.
While complicated factors like unchecked inflation and stagnant wages are surely having an effect on both weak housing supply and demand, there’s at least one novel factor contributing to the financial morass: AI data centers.
According to policy publication the Center Square, the frenzy to construct the computing facilities powering the AI boom is inadvertently scooping up the skilled trades workers who could otherwise be building new housing.
In an interview with CS, CEO of the Home Builders Institute Ed Brady explained that the American skilled trades industry is already short some 300,000 workers overall. And the trickle who are available at all, Brady says, are flocking to jobs developing the tech industry’s new data centers.
“The market is not as strong,” Brady told the outlet, “and so today many of those people that were in housing are going to these data centers.”
While Brady notes that labor supply in the construction industry has been trending downward since the Great Recession of 2008, he says the data center boom is only making things worse, and it’s not going to change anytime soon.
“This problem is going to get even more and more exaggerated and acute to the housing industry because of the data center construction,” Brady continues, “and we’re not putting enough money into training the future generations of skilled labor.”
More on data centers: The Economics of Data Centers Creating Jobs Are So Bad That They Sound Like a Joke