Builders and suppliers are noting significant shortages of certain home building materials even though new home and other construction is described as far below normal levels. The National Association of Home Builders (NAHB) and the National Lumber and Building Material Dealers Association (NLBMDA) reported the shortages based on recent surveys conducted by each.
Shortages of oriented strand board
(OSB) were reported by 22 percent of builders and 27 percent of
dealers and wall board by 20 percent and 12 percent respectively.
Plywood and framing lumber were also said to be in short supply by
respondents in the double digits in both surveys.
"Supply
constraints are one of the barriers to a more robust recovery,"
said NAHB Chief Economist David Crowe. "The shortages and price
increases reported by both home builders and lumber dealers are
particularly concerning given that the current rate of construction
is still far below what would be considered normal or necessary to
meet underlying demand."
More builders reported a
scarcity of wall board than did dealers but for each of the 23 other
building products about which each group were questioned more
suppliers reported shortages than builders. The share of builders
reporting a shortage of most products was higher than in similar
surveys conducted by NAHB in May of 2011 and 2012. The only
exceptions were copper wire, vinyl siding, HVAC equipment,
insulation, and structural insulated panels..
"The shares of reported shortages
are not as high now as they were in 2004 or 2005, but the increases
since 2012 are quite significant, especially when you take the early
stage of the housing recovery into account," said Crowe. "In
2004 and 2005 the home building industry was producing over 1.8
million new homes a year, while the current rate of new housing
starts is still below 1 million."
A larger percentage of
lumber dealers reported price increases in building materials over
the last six months than builders. Dealers reported an average
increase in the cost of materials they sell of 10 percent or more
while builders reported a 5.17 percent increase. Most builders than
suppliers reported increases in the cost of concrete related
products.
"While a nascent housing recovery is underway,
as reflected by the modest increase in sales by dealers, it's clear
that the ongoing material shortages and price increases being
reported by dealers continue to be a cause for concern as we move
into the latter half of 2013," said Michael O'Brien, NLBMDA
president and CEO.
NAHB's survey was in the form of special questions added to its monthly survey for its Housing Market Index. The dealer results come from a special survey of NLBMDA's members, who operate single or multiple lumber yards and component plants and deal in many of the same products that NAHB members purchase.