After two years of pandemic-related industry challenges, home builders across the U.S. thought they had already faced the brunt of supply chain disruptions and material shortages, but the war in Ukraine is kickstarting round two of delays and price hikes. The Russia-Ukraine conflict is impacting commodities like oil and metals, without which home construction will slow and affordability will decline.
Steel and diesel recently saw double-digit year-over-year increases at 75% and 58%, respectively, sending the cost of a single-family home to a new high, according to CNN.
"Even though the February numbers represent some of the highest year-over-year price increases ever recorded, they have already been surpassed by even steeper price hikes since the war in Ukraine broke out," Ken Simonson, the association's chief economist, said in a statement.
Higher oil and commodity costs spill over to myriad areas in the construction supply chain, and some effects are more immediate than others: Gasoline is needed to feed earth movers, haul supplies and transport workers to job sites; petroleum serves as a building block in critical materials, like asphalt, steel, glues, pipes and paints; and growing everyday expenses could further hamper people's ability to spend.