In 2018, building material prices topped the list of largest challenges builders face in the industry, but cost and availability of labor is expected to return to the number one spot in 2019, according to data from the January survey for the NAHB/Wells Fargo Housing Market Index. The survey showed material prices were an issue for 87% of builders last year, but only 69% of builders expect prices to be a problem this year. Cost/availability of labor rose to first with 82% of builders citing it as a problem.
In 2011, building materials prices was reported as a significant problem by 33% of builders. The share increased to 46% in 2012, 68% in 2013, 58% in 2014, 42% in 2015, 48% in 2016 and 77% in 2017, before peaking at 87% in 2018. Meanwhile, only 13% of builders reported labor as a significant problem in 2011, followed by 30% in 2012, 53% in 2013, 61% in 2014, 71% in 2015, 78% in 2016 and 82% in both 2017 and 2018.
Compared to the supply-side problems of materials, labor and lots, problems attracting buyers were not as widespread last year, but builders expect many of them to become more of a problem in 2019. Negative media reports making buyers caution was a significant problem for 48% of builders in 2018, but 62% expect it to be a problem in 2019. Gridlock/uncertainty in Washington making buyers cautious was a significant problem for 45% of builders in 2018, compared to 53% who expected it to be an issue in 2019. Concern about employment/economic situation was a problem for only 28% of builders in 2018, but 46% expect it to be a problem in 2019.Read More