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Persistent Supply Chain Issues Hold Builders Back


Persistent Supply Chain Issues Hold Builders Back

April 26, 2021
House being constructed
Photo: diyanadimitrova | stock.adobe.com

Demand for new homes remains high as existing home inventory rests at record lows, but builders continue to hit roadblocks from building materials and supply chain issues. Redfin forecasts more homes being built in 2021 than any other year since 2006, but, unfortunately for hungry homebuyers, builders’ hands remain tied as construction schedules drag due to delays in building materials and finishes. The Philadelphia Inquirer reports that one local building company typically waited four to six weeks for window deliveries, but that’s now 12 to 18 weeks. Another ordered vinyl siding four weeks in advance, but now it’s ordered as soon as foundation pouring begins.

Meanwhile, the price of lumber reached a record high this month, up more than 170% over the last 10 months. That adds thousands of dollars to the cost of a home, delays construction starts, and disrupts closings, according to the National Association of Home Builders.

Prices of building materials such as glass, drywall, and roofing also are up. Costs and supply-chain disruptions will slow the growth of residential construction this year, the association said, but strong buyer demand, partly due to low mortgage rates, is keeping builder confidence high.

In 2020, starts were up 11% from 2019 levels. Applications for building permits jumped 10.4% nationwide in January, signaling strong future construction activity. The National Association of Home Builders predicts that 2021 will be the first year since the Great Recession that builders will produce more than one million single-family homes.

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