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
Education | Economics | Remodeling
Aug 21, 2026
Experts Forecast the Remodeling Industry's Future
NAHB’s Mid-Year Remodeling Forecast Update webinar reviewed how the remodeling industry will weather changing economic conditions, homeowner priorities and market demand.
Safety
Aug 20, 2026
OSHA Hazard Communication Compliance Deadline Set for Nov. 20
A deadline for compliance with 2024 revisions to OSHA’s Hazard Communication Standard (HCS) is approaching for home builders and other downstream chemical users. Employers must comply with revised classifications or hazard information for substances in their workplaces by Nov. 20, 2026.
Latest Economic News
Economics
Aug 21, 2026
Second Quarter Declines for Single-Family Built-to-Rent
Single-family built-for-rent (SFBFR, or built-to-rent (BTR)) construction fell back in the second quarter of 2026, as a higher cost of financing, increased multifamily supply and policy concerns over Congressional legislation related to institutional capital froze parts of the development market.
Economics
Aug 20, 2026
Short-Term Townhouse Construction Weakness
Second quarter 2026 data reveal softer conditions for townhouse construction as housing affordability challenges affect homebuyer demand, particularly in larger metropolitan markets.
Economics
Aug 19, 2026
Flat Conditions for Custom Home Building
With overall single-family construction down almost 7% for the first seven months of 2026, custom home building has been a relative bright spot for the residential construction industry.