Strategies Builders Employ to Combat Rising Building Material Costs and Shortages
How have single-family builders reacted to recent shortages and price increases in building materials?
The most common strategies, cited by 62% and 59% of builders, were to raise their prices on their homes frequently and pre-ordering materials, according to a June survey for the NAHB/Wells Fargo Housing Market Index (HMI).
These approaches were followed by price escalation clauses (45%, waiting until late in the construction process before listing spec homes (39%) and cost-plus pricing (32%).
Only 2% of builders indicated they had adopted none of the listed techniques for dealing with the shortages and rising cost of materials.
While some of the most dramatic price increases over the past year involved lumber prices, this has caused very few builders to switch away from traditional wood framing, although some are considering it. In particular, 17% are considering switching to steel, 16% to structural insulated panels, 14% to insulated concrete forms and 8% to concrete masonry.
NAHB Senior Economist Paul Emrath provides more analysis in this Eye on Housing blog post.
Single-family home builders are invited to join the exclusive group of NAHB members who participate in the HMI survey. To begin receiving these monthly surveys, please submit this form.
Latest from NAHBNow
Jun 30, 2026
NAHB Welcomes First Cohort of New Master Credential HoldersAs of June 25, 62 industry leaders hold the new title of Certified Master Builder or Remodeler, and the numbers continue to grow weekly.
Jun 29, 2026
Use NAHB Resources to Protect Workers from Heat and UV ExposureAs NAHB recognizes UV Safety Awareness Month in July, it is important for home builders and general contractors to educate workers about the potential risks associated with ultraviolet (UV) radiation and have plans and resources in place to keep them safe on the jobsite.
Latest Economic News
Jun 30, 2026
Consumer Confidence Inched Up in JuneConsumer confidence inched up in June due to improved views of business conditions and recent declines in oil prices easing inflation fears.
Jun 30, 2026
Construction Job Openings IncreaseThe number of open positions in the construction sector increased in May, per the Bureau of Labor Statistics Job Openings and Labor Turnover Survey (JOLTS). The current level of open jobs is down measurably from three years ago due to declines in construction activity, particularly in housing.
Jun 26, 2026
Property Tax Revenue Leads State and Local Tax Growth in Q1 2026Property tax revenue collected by state and local governments was higher in the first quarter of 2026 according to the Census Bureau’s quarterly summary of state and local tax revenue.