Prices for building materials were a significant issue for 96% of builders in 2021, and 91% of the builders expect it to continue being a problem in 2022, according to the NAHB/Wells Fargo Housing Market Index.
Availability/time it takes to obtain building materials was also a predominant issue for the large majority (91%) of builders, and 90% expect it will remain an issue in 2022. The high incidence of builders reporting building material problems is not surprising given recent increases in material prices.
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.
Although 82% indicated it was problem in 2021, 85% expect that problem to continue in 2022. The large number of unfilled job openings in the construction industry is an indicator of this issue.
Other problems that are expected to become worse in 2022 include:
- Rising inflation in U.S. economy
- Federal environmental regulations and policies
- Gridlock/uncertainty in Washington making buyers cautious
- Concern about employment/economic situation
- Taxes on home builders
- High interest rates
- Attempts to limit mortgage interest deduction/other
NAHB Senior Economist Ashok Chaluvadi provides more information in this Eye on Housing post.