The 4 factors slowing home construction

There’s just something special about building your own house. Whether building a home has been part of your long-term plan, or it’s a new strategy due to the shortage of existing homes to buy, various aspects of our economy are affecting new construction timelines and costs. 

Here are four things you need to know:

  1. Low inventory in existing homes for sale has created an increased interest in building a house for many people. This has put a strain on home construction resources.
  2. Supply chain shortages that began during the pandemic continue to have an impact on availability of things like doors, windows, appliances, and other basic items needed to construct a home. The National Association of Home Builders (NAHB®) shared these shocking statistics from 2021:
    • More than 90% of builders reported shortages of appliances, framing lumber, and OSB.
    • 87% said there was a shortage of windows and doors.
    • 95% of builders reported a shortage of appliances in May 2021 — the single highest shortage percentage on any item since NAHB began collecting information in a systematic way in the 1990s.
  3. Increased materials costs due to the shortages mentioned above.
  4. Reduced workforce in the construction industry, which has been partially pandemic-driven. Experts estimate that the industry needs to attract nearly 650,000 additional workers on top of the normal pace of hiring in 2022 to meet the demand for labor.

Although nearly all areas in the United States have been impacted by these challenges, some communities haven’t been hit as hard. The Business Tribune reports that Seattle has 26,000 units currently under construction, while Portland has a little over 7,000 units.

Watching your land go from an empty lot to a beautiful home filled with friends and family is an awesome experience, so it can be discouraging when the process is slow. Hang in there as we start to see improvements in the supply chain and workforce.

Feel free to reach out to one of our construction loan officers. We’re happy to answer any questions you have!

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