Supply-Chain Challenges Continue to Hamper New Home Building

New York, NY, January 10, 2022--Supply-chain backlogs are roiling the new home market, upending efforts to accelerate construction, limiting home-buyer choices, and causing some new owners to move into unfinished homes, reports the Wall Street Journal.

“Home builders have increased activity in the past year in response to robust home-buying demand and a shortage of homes in the existing-home market. In many cases, the surge in demand in late 2020 and early 2021 overwhelmed builders, forcing many to halt sales in some markets while they caught up.

“Now the industry is struggling with global supply-chain woes. Pandemic-related factory closures, transportation delays and port-capacity limits have stymied the flow of many goods and materials critical for home building, including windows, garage doors, appliances and paint. Freezing weather and power outages in Texas in February led to a shortage of resin, which is used in many home-building products.

“While supply-chain delays for some products showed signs of easing at the end of last year, builders say it is still taking weeks longer than normal to finish homes. About 90% of home builders surveyed by housing-market research firm Zonda in November said they were experiencing supply disruptions, up from 75% in January 2021.

“Delivery delays can cause a domino effect of rescheduling work crews, which is worsened by a shortage of skilled tradespeople in many markets.

“Many builders so far have been able to pass increased material costs along to home buyers. But with home prices higher than ever-the median price of a newly built home in November rose 18.8% from a year earlier to a record $416,900-some builders are concerned about pricing out potential buyers.

“Builders are scrambling to find new suppliers, stock up on building products and use substitute materials. Some are scouring retail big-box stores for products they can’t find through the normal supply channels.

“That was the case with builder Epcon Communities in Dublin, Ohio, which bought metal shower grab bars online because they weren’t available through its typical commercial suppliers, said Stew Walker, Epcon’s vice president of construction. The company’s electrical subcontractor resorted to buying electrical boxes in hardware stores, he said.

“‘From one week to the next, the only thing we know is that we’re going to get notified of something else that is unavailable,’ Mr. Walker said.

“Epcon sold some homes last year without gutters and downspouts, then installed those features after buyers had already moved in, Mr. Walker said.”