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
Advocacy
Oct 23, 2026
Trump Issues Executive Order to Lower Housing Costs
President Trump on Oct. 22 signed an executive order to lower single-family and mortgage costs, and the Treasury Department released new institutional investor rules.
Advocacy
Oct 23, 2026
NAHB Commends President Trump’s Executive Order on Housing
NAHB Chairman Bill Owens issued the following statement today regarding President Trump’s housing executive order.
Latest Economic News
Economics
Oct 22, 2026
Share of New Homes with Decks Inches Upward
The share of new homes with decks inched upward, from an all-time low of 17.4% in 2024 to 17.8% in 2025, according to NAHB tabulation of data from the HUD/Census Bureau Survey of Construction (SOC).
Economics
Oct 22, 2026
State-Level Employment Situation: September 2026
State-level employment data for September continued to show a mixed labor market, with job gains and losses split across the county. Although national nonfarm payroll employment increased modestly, year-over-year job growth varied considerably across states
Economics
Oct 21, 2026
Nearly One in Three Construction Workers are Hispanic
Diversifying the construction labor force remains a key priority amid persistent skilled labor shortages. According to NAHB analysis of the 2024 American Community Survey, non-Hispanic White workers account for the majority of the construction industry at 55.8%. Hispanic workers now represent nearly one-third of the labor force at 32.8%, followed by non-Hispanic Black workers at 5% and non-Hispanic Asian workers at 1.8 %.