Materials Remain Top Challenge for Builders, but New Issues Are Becoming Increasingly Problematic

Economics
Published
HMI Jan 2023 Special Graph

The price and availability of building materials again topped the list of problems builders faced last year, but interest rates, general inflation and negative media moved considerably up the list.

According to responses on the January 2023 survey for the NAHB/Wells Fargo Housing Market Index (HMI), building material prices were the most significant issue for builders in 2022 (cited by 96% of builders), followed by availability and timing to obtain building materials (cited by 86% of builders). Both problems topped the list in 2021 as well.

Cost and availability of labor has also been a relatively widespread problem, reported as a significant issue by 82% of builders in 2021 and 85% in 2022 — which is not surprising, given the large number of unfilled job openings in the construction industry. 

However, some problems became significantly more widespread in 2022. High interest rates were a problem for only 2% of builders in 2021 but affected 66% of builders in 2022. Rising inflation in the U.S. economy was a significant problem for 85% of builders in 2022, compared to 63% in 2021. And negative media reports making buyers cautious also affected 55% of builders in 2022, compared to 26% in 2021.

More builders (93%) expect high interest rates to be a problem in 2023, up strongly from the 66% who said it was a problem in 2022. Moreover, both the current and expected numbers were much higher in the recent survey than at any time between 2011 and 2021.

NAHB senior economist Ashok Chaluvadi provides more insights in this Eye on Housing post.

Subscribe to NAHBNow

Log in or create account to subscribe to notifications of new posts.

Log in to subscribe

Latest from NAHBNow

Safety

May 21, 2025

New Resources on the Safe Use of Mobile Elevated Work Platforms (MEWP)

Mobile Elevated Work Platforms (MEWPs) are vehicle-mounted machine lifts used to help workers complete tasks more efficiently in an elevated position. They are commonly used across the construction industry because of their ability to reach and maneuver around elevated areas.

Advocacy | Tax Reform

May 20, 2025

Podcast: One Big, Beautiful Podcast – NAHB Talks Tax Bill

On the latest episode of NAHB’s podcast, Housing Developments, CEO Jim Tobin and COO Paul Lopez are joined by AVP of Government Affairs J.P. Delmore to dive into the “big, beautiful” tax bill that’s been introduced.

View all

Latest Economic News

Economics

May 21, 2025

Gains for Multifamily Missing Middle over Last Year

The missing middle construction sector includes development of medium-density housing, such as townhouses, duplexes and other small multifamily properties.

Economics

May 20, 2025

Single-Family Home Size Trending Higher

An expected impact of the virus crisis was a need for more residential space, as people used homes for more purposes including work. Home size correspondingly increased in 2021 as interest rates reached historic lows. However, as interest rates increased in 2022 and 2023, and housing affordability worsened, the demand for home size has trended lower.

Economics

May 20, 2025

Slight Gains for Townhouse Construction

Townhouse construction expanded more than 2 percent on a year-over-year basis per data from the first quarter of 2025.