Different supplies cost more but are cheaper than delayed closings, builders rationalize. They’re asking, “What else can I use?” for things like plywood and insulation.
NEW YORK – Builders are up against short supplies of a variety of materials needed to build homes, such as wood paneling, ceiling joists and pipes. As a result, they’re searching for substitutes to keep construction schedules on time, but the process is also adding to their costs.
Supply shortages have become a common story in the homebuilding industry over the past year. More than 90% of builders say they’ve faced a shortage of appliances, framing lumber, plywood and oriented strand board (a type of engineered wood), according to a survey from the National Association of Home Builders conducted in May. And 87% of builders cited shortages of windows and doors.
A winter storm in Texas earlier this year made the problem worse. It diminished supplies of several building materials.
That prompted Straub Construction in Shawnee, Kansas, to switch to different insulation materials for its projects after that storm made it difficult to get some types of petroleum-derived roof insulation boards. But that switch added about $20,000 to the costs for the construction of two apartment building projects they’re building. The alternative by not switching though? Wait six to nine months for the boards.
“I’ve been in the industry for 30 years and never seen anything like this,” Parker Young, president of Straub Construction, told The Wall Street Journal.
Builders are showing more willingness to pay for the substituted materials in order to try to avoid construction delays. They fear that not doing so could cost them some lost sales.
Demand for new homes has surged. Shortages of materials first started when the pandemic began and some factories temporarily shut down. Since then, factories have had a tough time catching up due to high demand, staffing shortages and other challenges.
The uncertainty of the availability of materials is challenging builders to price out homes.
“We’re just concerned that this is not going to get any better right now,” Tony Rader, vice president of National Roofing Partners in Coppell, Texas, says.
Source: “Builders Hunt for Alternatives to Materials in Short Supply,” The Wall Street Journal (Oct. 6, 2021) [Log-in required.]
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