Top Builder Challenges for 2018: Labor Access and Building Material Prices

Filed in Construction Industry, Economics by on January 19, 2018 3 Comments

The cost and availability of labor along with building material prices stand out as the two most significant problems builders expect to face in 2018, according to a recent survey of NAHB members.

A whopping 84% of respondents cited these two issues as major challenges this year, and not surprisingly, these were the top two concerns cited by builders in 2017.

As NAHB economist Ashok Chaluvadi reported in a recent Eye on Housing blog post, labor and building material prices have become a growing concern for builders in recent years. In 2011, just 11% of builders rated labor as a significant problem while 33% reported building material prices as a major problem.

Rounding out the top five concerns for builders in 2018 are the cost/availability of developed lots (62%), impact/hook-up/inspection or other fees (60%) and inaccurate appraisals (42%).

Two emerging issues for builders in the coming year are attempts to limit the mortgage interest deduction/other support for housing and high interest rates. Forty-nine percent of builders expect the issue relating to housing tax incentives to be a problem in 2018 vs. 31% who said it was a problem in 2017. Although the share who expect high interest rates to be a concern this year is still relatively low at 18%, this is up strongly from the 4% who said it was a problem last year.

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