BLOGS

Considering Building a New Home? Here’s What You Should Know

If you’re looking to upgrade your living situation, you might be weighing the pros and cons of buying an existing home versus building a new one. With the current shortage of homes available for sale, exploring both options makes sense. However, it’s important to understand that building a new home comes with its own set of challenges, largely due to factors beyond the control of homebuilders.

Here’s a closer look at some of the key obstacles that could affect your decision to build and how staying informed about the industry can help you make the right choice.

Supply Chain Disruptions

One of the most significant challenges homebuilders face today is the ongoing supply chain crisis. HousingWire reports:

"Nearly every material needed in the construction process is encountering delays and price hikes."

While lumber has been the focus of many headlines, it’s far from the only material in short supply. Builders are also struggling to obtain essential items like roofing materials, windows, garage doors, siding, and gypsum for drywall. These shortages are extending the time it takes to complete new homes as builders wait for materials. Moreover, the scarcity of supplies is driving up costs due to increased demand. HousingWire puts it succinctly:

"When supplies are low, prices inevitably rise, . . . Meanwhile, a lack of availability is causing significant delays, meaning builders are finding it difficult to stay on schedule."

The National Association of Home Builders (NAHB) echoes this sentiment:

"Builders are grappling with supply-chain issues that are extending construction times and increasing costs."

Skilled Labor Challenges

In addition to material shortages, the construction industry is also facing a shortage of skilled labor. This issue has persisted for over a decade, according to Odeta Kushi, Deputy Chief Economist at First American:

"The skilled labor shortage in the construction industry is not new – it’s been an issue for more than a decade now."

However, there is some good news. The latest jobs report indicates an increase in employment within the construction sector. Kushi comments on this positive development:

"Overall, this was a good report, . . . The supply of workers continues to fall short of demand, but the underlying momentum of the labor market recovery is strong, and falling COVID case counts provide further forward momentum."

While the labor shortage remains a challenge, there are signs of improvement that could help alleviate some of the delays in new home construction.

What This Means for You

For those considering building a new home, these supply and labor issues are crucial to factor into your decision-making process. As HousingWire notes:

"The residential construction industry is facing a crisis as builders manage the critical shortage of building materials and labor. Explosive supply and labor costs are forcing long delays. . . ."

If you’re deciding between building a new home or purchasing an existing one, consider the potential delays in construction. While building may still be a viable option, it’s important to weigh your timeline and whether you’re prepared for possible waiting periods.

Final Thoughts

Understanding the current market dynamics is essential to making an informed decision about your next move. If you’re thinking about building a new home, let’s connect. We can discuss the latest developments in our local market and help you determine the best course of action based on your priorities and timeline.

| 8-16-2024