Key Building Material Shortages Ease in 2014

Filed in Economics, Home Building, Housing Trends by on August 13, 2014 0 Comments

Unlike recent news that builders continue to face serious difficulties finding lots and labor to build new homes, a July NAHB survey shows that shortages of key building materials have actually eased in 2014.

In fact, only 15% of builders reported some or serious shortages of trusses or clay bricks, the highest incidence among the more than 20 materials builders were asked about. Fourteen percent reported shortages of windows and doors, gypsum wall board and cabinets, respectively.

The graph below shows the complete list of the 23 building materials and products in the survey, sorted by the share of builders reporting shortages.

Shortages1[1]

 

For a number of key materials, the share of builders reporting any kind of shortage was lower in July 2014 than in May 2013.

For example, 18% of builders last May reported shortages of plywood, and 22% said there was a lack of oriented strand board (OSB). Those shares fell to 7% and 9%, respectively, in July 2014. Likewise, the percentage of builders reporting a shortage of framing lumber fell from 18% to 8% during this period, while for wallboard the share dropped from 20% to 14%.

Shortages2[1]

Recent PPI data shows that building material prices by mid-2014 were about the same as at the start of the year. NAHB’s  survey confirmed that price increases this year are far less widespread than in 2013.

For example, the share of builders reporting price hikes for OSB fell from 92% in 2013 to 68% in 2014; for plywood the year-to-year drop was from 90% to 70%, and framing lumber went from 92% to 73%.

The graph below shows the materials/products with at least a 10-point decline in the share of builders reporting price increases during this period. Despite the declines, however, it is important to recognize that a majority (or large pluralities) of builders still reported price increases in all these materials.

 

Shortages3a[1]For a few materials, the share of builders reporting price increases in 2014 was slightly larger than in 2013. For hardwood flooring, the share rose to 55% from 46%; for cabinets, it went up to 63% from 57%; and the percentage of builders reporting a price hike in ceramic tiles rose to 40% from 34%.

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