The timeline for new home construction is becoming noticeably longer in many parts of the country. This slowdown comes at a time when new homes are in high demand as the inventory of available homes for sale shrinks to a historic low.
Almost two years of supply chain disruptions prompted by the COVID-19 pandemic caused builders to not receive needed materials on a timely basis, leading to multiple project delays. Delayed deliveries of materials like lumber, appliances, windows and garage doors all contributed to lengthened construction timelines of new homes. With each delay, the time until the home was ready for move-in continued to grow.
Now, these material issues coupled with growing concerns over inflation, increases in mortgage rates and lack of available lots are delaying the timeline of residential construction even more.
Additionally, construction companies are having difficulties finding available skilled laborers. According to an Associated Builders and Contractors (ABC) analysis of data from the U.S. Bureau of Labor Statistics, the construction industry documented 449,000 job openings nationwide in April. This is a 5% increase from March and a 36% year-over-year increase. Employees quitting in the construction sector is up 12% from this time last year.
“The desperate search for skilled construction workers persists,” said Anirban Basu, ABC’s chief economist. “The number of available, unfilled construction jobs continues to expand.”
Despite these construction headwinds, new homes are in high demand in many areas of the country. Existing home listings are still at an all-time low and there is a strong market demand for more supply. Many builders have waiting lists of buyers eager to buy a new home, despite longer wait times.