NAHB: Builders Are Increasing Prices and Pre-Ordering in Response to Material Shortages

Despite rising lumber prices, very few builders have made the switch away from traditional wood framing.

Rising material prices and supply-shortages remain an issue in the construction sector. Data from the National Association of Home Builders (NAHB) indicates material prices for the same house have increased by 26% and a majority of builders have reported difficulties sourcing materials such as lumber, windows and doors, and appliances. According to a recent NAHB survey, builders have reacted to material shortages most commonly by raising prices and pre-ordering materials. Only 2% of respondents to the monthly survey for the NAHB/Wells Fargo Housing Market Index (HMI) reported taking no actions to deal with material shortages and price increases.

However, despite the dramatic increases in lumber prices, very few builders have switched away from traditional wood framing, according to the NAHB. Fewer than 20% of builders are even considering switching to steel, structural insulated panels, insulated concrete forms, or concrete masonry. An analysis of Census Bureau data by the NAHB indicates that in 2020, the total number of concrete-framed homes decreased 13% compared to 2019.