The price and availability of building materials remained the top challenge listed by builders during 2022, according to a survey conducted for the NAHB/Wells Fargo Housing Market Index. Building material prices were identified as a significant issue for 96% of builder respondents in 2022, and the availability and time it takes to obtain building materials was cited as a significant issue by 86% of respondents. Additionally, interest rates, general inflation, and negative media reports become more significant problems for builders in 2022 compared with 2021.
High interest rates were a problem for only 2% of builders in 2021, but this increased to 66% in 2022. Rising inflation in the US economy was a significant problem for 63% of builders in 2021, compared to 85% in 2022. And 26% of builders said negative media reports making buyers cautious was a significant problem in 2021, compared to 55% in 2022.
Even more builders—a full 93%—expect high interest rates to be a problem in 2023, up strongly from the 66% who said it was a problem in 2022. Moreover, both the current and expected numbers were much higher in the recent survey than at any time in the 2011-2021 span.
Negative media reports making buyers cautious was a significant problem for 55% of builders in 2022, but 79% expect them to be a problem in 2023. Buyers expecting prices or interest rates to decline if they wait was a significant problem for 49% of builders in 2022, compared to 80% who expected it to be an issue in 2023. Concern about employment/economic situation was a problem for only 41% of builders in 2022, but 73% expect it to be a problem in 2023. Gridlock/uncertainty in Washington making buyers cautious was a significant problem for 38% of builders in 2022, compared to 54% who expect it to be a problem in 2023.
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