Builders are facing increasing challenges with a shortage of materials and the cost of those materials.
According to the National Association of Home Builders, 90% or more of builders reported shortages of appliances, framing lumber, oriented strand board (which is generally used for walls, flooring and roof decking) and plywood. Seventy percent or more reported shortages of windows, doors, trusses, copper wiring, plumbing fixtures and fittings, vinyl siding, millwork, gypsum wallboard and lightweight steel. This is extremely unusual, NAHB reported. A year ago, less than 40% of builders reported a shortage of any of the supplies, and today, more than 40% of builders are reporting a shortage of 24 supplies.
One year ago, builders were not commenting on a shortage of appliances at all, but this year, 95% of builders said they have noticed this shortage, which is the single highest percentage since NAHB began collecting this information nearly 30 years ago. Not surprisingly, the lack of lumber products were the materials that saw the biggest gains in year over year shortage numbers, rising anywhere from 79% to 83%. While the shortage of lumber has been widely reported, the growing lack of other building materials could contribute to rising new home prices. In April, NAHB reported that the huge leap in cost of lumber added close to $36,000 to the home’s final price tag and $13,000 to the market value of a new multifamily home.
The majority of builders reported that the cost of building materials have risen at least 10%, while 15.2% of builders said supplies have jumped 50% or more. On average, builders estimated that the cost of these materials have risen 26.1% year over year.