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Labor shortage and building material costs still hammering the new home market
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New numbers came out today from the Census Bureau on housing starts for the month of June. Construction on new homes declined a bit in the last report (April to May). But overall, new construction is stronger than it was last year, at the height of the pandemic.
However, there are other factors influencing new housing construction. Demand for new homes is still outpacing the supply.
“We definitely have a shortage of housing in this country,” said Jeffrey Cleveland with Payden & Rygel, adding there’s also a shortage of construction workers right now.
“Builders can’t build them fast enough, and they can’t get enough labor to put them together,” he said.
Adding to the labor shortage, the high price of lumber a couple of months ago put the brakes on new home building. Now, the price of lumber is dropping.
“The turnaround has been dramatic from what we saw over the past year and a half,” said Ken Simonson with the Associated General Contractors of America.
But, he said builders are still looking at high prices for other key building materials, like copper and brass.
“For instance, the index for steel mill products went up 87% … for aluminum 33%. So these are staggering increases,” he said.
And so, the cost of materials along with the labor shortage means it’s still a challenge to put up a new home.
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