Contractors and builders are now being forced to use alternative sources for crucial construction materials because of a widespread shortage on building materials, resulting in increasing prices amid growing demand for American homes, The WSJ reported.
Construction companies are using new sources for supplies, including ceiling joists, wood paneling, and pipes, as shortages because of supply chain disruptions have caused prices to go up, the WSJ reported.
Supply chain snarls are hitting home construction: Shortages of key building materials are driving up costs and hampering production of new homes as builders seek alternative supplies. https://t.co/JIvCN9DMQJ
— Paul Page (@PaulPage) October 6, 2021
Builders say they would rather pay the premium for better supplies rather than delay their projects for months while waiting for manufacturers to deliver the materials.
Crowded ports in Asia and large labor shortages in the United States have helped create global supply chain problems, lowering the available products and leading to a spike in prices. There are now 10.9 million jobs available in the United States with the nation experiencing 5.2% unemployment, according to new labor statistics.
A global semiconductor shortage has made home appliances even more expensive and less widely available, as reported by the WSJ. General Motors also experienced a 33% fall in sales which the company linked to the global bottleneck among semiconductor chips, according to their Q3 sales report.
Whirlpool Corp, one of the biggest appliance companies worldwide, said in March its chip orders fell below orders by around 10%, making it much harder to keep up with demand, Reuters said.
Parker Young, the owner of Straub Construction, said to the WSJ that he was forced to changed materials after the Texas storms stopped production, costing him around $20,000. He decided to spend a premium for good supplies rather than wait for original insulation, which would have extended his project six to nine months.
“It is unprecedented,” Young said to the WSJ. “I have been in the industry for 30 years and I have never seen anything like this.”
The explosion in prices for building supplies comes during low inventory for properties and increasing demand. The S&P CoreLogic Case-Shriller National Home Price Index, which measures home prices in top metro areas in the United States, went up by almost 20% at the end of July, the record figure since 1987.
Author: Scott Dowdy