Builders Cite Building Material Prices as Top Challenge

Filed in Economics, Trends by on February 23, 2021 2 Comments

Nearly nine out of 10 builders expect building material prices will be their top challenge in 2021. To show the magnitude of this problem, the 89% builder response is down from the 96% of builders who reported this issue as their top concern in 2020.

Along the same lines, the No. 2 problem builders faced in 2020 was the availability/time it takes to obtain building materials. This issue was cited by 78% of the respondents last year, while 80% of builders report this will be a key concern in 2021. The high incidence of builders reporting building material problems is not surprising given recentĀ increases in material prices.

The builder responses were from a December 2020 survey for the NAHB/Wells Fargo Housing Market Index, where builders were asked about the problems they confronted in 2020 and expect to face in 2021.

Compared to the supply-side problems of materials, labor and lots, concerns regarding federal government policies were not as widespread last year, but builders expect that to change in 2021.

For example, 28% of builders reported federal environmental regulations and policies as a significant problem in 2020 while 48% of builders expect this to be an issue in 2021. In another example, 21% of respondents last year reported that taxes on home builders was a problem while 41% of builders expect this will be a significant issue this year.

NAHB economist Ashok Chaluvadi provides more analysis in this Eye on Housing blog post.

Tags: ,

Leave a Reply

Your email address will not be published. Required fields are marked *