Charts: Material Cost and Availability Top Builder Pain Points
Much like last year, the price and availability of building materials topped the list of problems builders face. According to special questions on the December 2021 survey for the NAHB/Wells Fargo Housing Market Index, building material prices were a significant issue for 96% of builders in 2021, and 91% of the builders expect it to continue being a problem in 2022. The second most widespread problem in 2021 was availability/time it takes to obtain building materials cited by 91% of builders. In 2022, the share of builders expecting availability/time it takes to obtain building materials is expected to be 90%. The high incidence of builders reporting building material problems is not surprising given recent increases in material prices.
In 2011, building materials prices was reported as a significant problem by 33% of builders, followed by 46% in 2012, 68% in 2013, 58% in 2014, 42% in 2015, 48% in 2016 and 77% in 2017, 87% in 2018, and 66% in 2019 before peaking at 96% in both 2020 and 2021.
Meanwhile the cost and availability of labor was reported as a significant problem by only 13% of builders in 2011. The share increased to 30% in 2012, 53% in 2013, 61% in 2014, 71% in 2015, 78% in 2016, 82% in both 2017 and 2018, 87% in 2019 and 65% in 2020. While 82% said it was problem in 2021, 85% expect it to continue being a problem in 2022. Again, this result is not surprising given the large number of unfilled job openings in the construction industry.
Compared to 2021 builders expect some of the problems to become worse in 2022. Rising inflation in US economy was significant problem for builders in 2021 and 2022. While the share was 63% in 2021, it is expected to increase significantly to 90% in 2022. Federal environmental regulations and policies was a significant problem for 37% of builders in 2021, compared to 52% who expected it to be an issue in 2022. Gridlock/uncertainty in Washington making buyers cautious was a significant problem for 32% of builders in 2021, but 50% expect it to be a problem in 2022. Concern about employment/economic situation was a problem for 24% of builders in 2021, but 46% expect it to be a problem in 2022. While Taxes on home builders was a problem for 23% of builders in 2021, it will be significant problem in 2022 for 43% of builders. High interest rates was a problem for only 2% of builders in 2021, but 31% of builders expect it to be a significant problem in 2022. Attempts to limit mortgage interest deduction/other was a problem for 12% of builders in 2021, but 30% expect it to be a problem in 2022.
For additional details, including a complete history for each reported and expected problem listed in the survey, please consult the full survey report.