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The War in Ukraine Is Widening a Supply Chain Crisis for Home Builders

Manufacturers + Suppliers

The War in Ukraine Is Widening a Supply Chain Crisis for Home Builders

Home builders across the U.S. are feeling the aftershock of Russia’s invasion of Ukraine as material prices rise to unprecedented highs

April 4, 2022
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After two years of frequent and frustrating supply chain disruptions slowing new home construction across the U.S., the Russia-Ukraine conflict is creating yet another obstacle for home builders. As prices for commodities like steel and diesel see double-digit year-over-year increases, home building is becoming more costly than ever before, CNN Business reports.

Meanwhile, an unrelenting seller’s market is sustaining heated competition and causing year-over-year home price gains of more than 32%, further fueling demand and creating a sense of urgency for stalled builders struggling to keep up.

Most of the materials and commodities the construction industry depends upon are seeing double-digit year-over-year cost increases, with steel and diesel seeing some of the largest gains, at nearly 75% and nearly 58%, respectively, according to the Associated General Contractors of America's analysis of February Producer Price Index data.

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.

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