Homebuilding is still falling short in many markets in alleviating the shrinking inventories of homes for sale. But builders are blaming the construction shortfall on several factors.
Builders revealed the following top 10 “significant” problems they expect to face in 2018, according to the National Association of Home Builders and Wells Fargo Housing Market Index:
- Cost/availability of labor: 84%
- Building material prices: 84%
- Cost/availability of developed lots: 62%
- Impact/hook up/inspection or other fees: 60%
- Local/state environment regulations and policies: 45%
- Inaccurate appraisals: 42%
- Federal environment regulations and policies: 42%
- Difficulty obtaining zoning/permit approval: 42%
- Gridlock/uncertainty in Washington making buyers cautious: 42%
- Development standards (parling, setbacks, etc.): 38%
Once again for 2018, builders said the cost and availability of labor is their chief concern. The number of builders who are reporting this as a problem is growing. In 2017, 82 percent of builders said cost and availability of labor was their top concern; the percentage has grown to 84 percent of builders heading in 2018.
The availability of labor started growing as a problem among builders since 2011. In 2011, just 13 percent of builders rated labor as a significant problem, but by 2012, the percentage jumped to 30 percent and has ever since continued to increase each year.
“Both the availability of labor and lots highlight the expected constraints of a recovering housing market,” the NAHB reports.
Source: “Building Materials Prices and Labor Access Top Challenges for 2018,” National Association of Home Builders’ Eye on Housing blog (Jan. 16, 2018)
