A labor shortage in residential construction has contributed to strong job growth, robust wages, and bonuses for workers.
A shortage of skilled labor has contributed to a shortage of new homes in the United States, which has brought prices to new records in 2025. When ADP Research examined five-year trends in demand, employment growth, pay, and demographics for the skilled builder trades, we came away with five important findings:
- Employment in residential construction is growing at a rapid pace.
- Construction wages are greater than the U.S. median.
- Bonuses are larger than the national average.
- Construction workers are getting younger.
- Demand for workers recently has slowed.
A critical skills shortage
A shortage of skilled labor has challenged the residential construction industry for nearly two decades. The non-profit Home Builder Institute, which provides construction training, estimates that this labor shortage has cost the United States the equivalent of 19,000 single-family homes, representing an economic loss of more than $8.1 billion in 2024.
Demand is particularly high for HVAC, plumbing, electrical, and framing experts, the Home Builder Institute found in a recent study. As skilled workers age, too few young adults are entering the industry. Employers are raising wages to compete for a smaller pool of workers.
And as labor costs rise, builders are extending project timelines and constructing fewer houses, contributing to a crisis of affordability. In June, the median cost of an existing home rose year-over-year for the 24th consecutive month, to a record $435,300, according to the National Association of Realtors, before falling slightly in July.
Our findings
ADP Research analyzed hiring and wages for residential construction workers between January 2020 and June 2025.1For this report we looked at the following NAICS codes: residential building (2361); foundation, structure, and building exterior contractors (2381); other specialty trade contractors (2389); building finishing contractors (2383); land subdivision (2383).
Using ADP payroll data, we examined more than 400,000 workers aligned with the above NAICS codes to calculate the median wages, bonus amounts, and median worker age. Median wage and bonus trends were calculated using ADP Pay Insights methodology.
Wage metrics for the four job titles—HVAC professionals, electricians, plumbers, and carpenters—also were calculated using Pay Insights methodology. We selected individuals whose job titles contained a relevant keyword, such as electrician, plumber, carpenter, HVAC, heating, ventilation, air conditioning, and refrigeration. We uncovered five interesting findings.
Construction employment has outpaced overall job growth
Construction employment has grown by 13 percent since January 2020, more than twice as fast as U.S. job growth, at 6 percent. This gap in job creation has widened markedly since 2024.
Construction wages are higher than the U.S. median
Median wages for residential construction workers are about 10 percent higher than all other industries combined, and they’ve continued to rise in step with broader pay gains over the past five years.
Median annual pay for construction workers was about $58,000 in January 2020 and nearly $66,400 in June 2025, an increase of almost 15 percent. During the same time period, median pay for workers in all other industries combined increased by 16 percent, from a median of $52,000 to more than $60,200.
After lagging U.S. pay growth for several years, year-over-year pay growth for residential construction workers outpaced U.S. wage growth for about a year before losing momentum again in 2025.
Starting in 2023, HVAC professionals, electricians, and plumbers started to experience faster year-over-year wage growth than U.S. workers as a whole. Carpenters, however, have lagged national wage growth since our observation began in 2020.
Construction bonuses recently hit a record
These in-demand workers continue to benefit from bonuses. For the rest of the labor force, these occasional or one-time perquisites grew in size during the labor shortages of the coronavirus pandemic but have been shrinking since.
Construction has been a big exception. In December 2024, the median construction bonus hit a record high of $1,232, more than 2.5 times the typical bonus awarded to other workers.
Construction workers are getting younger
Home builders have struggled to recruit young adults into the business, which for some time has been carried by older workers. But since January 2020, the median age of electricians, plumbers, carpenters, and HVAC professionals has fallen by as much as five years as the age of U.S. workers has remained relatively steady, falling by only one year.
This finding supports the hypothesis that older workers are leaving the profession, putting more strain on the industry.
Employment demand has fallen
This strong run for construction workers might be slowing as elevated mortgage rates and high prices take a toll on homebuyer demand. Job openings in construction dipped in July and have since trailed overall U.S. openings.
