Survey highlights housing affordability challenges made worse by longer construction delays
High lumber prices continue to be one of the biggest obstacles to multifamily construction, according to the new version of the NMHC Construction Quarterly Survey.
The survey, which tracks challenges in multifamily development that have persisted beyond the pandemic, revealed that 92% of the respondents reported experiencing deals being repriced up by 25% on average over the past three months. The main driver of the increase? Lumber prices – with the average respondent reporting a 45% surge in prices over the past quarter.
Additionally, builders and developers experienced drawbacks caused by shortages in labor and logistics/transportation. More than half of the survey respondents (55%) said that labor costs increased more than expected over the last three months.
Overall, about 89% of respondents reported construction delays, and of those experiencing overall delays, 85% experienced delays in both starts and permits.
Despite the delays, US housing starts were up by 6.8% year over year to a seasonally adjusted rate of 1.77 million units in February, according to the Census Bureau. Single-family starts rose 5.7% to 1.22 million units, and multifamily starts increased 9.3% to 501,000 units.
Read more: US housing starts regain momentum as demand remains solid
“Our nation is currently facing deep housing affordability challenges that can only be addressed through building new homes. Yet, rising costs, permitting delays and a lack of labor are making it increasingly difficult to develop housing of all types,” said NMHC president Doug Bibby. “Lawmakers at all levels of government need to acknowledge this crisis and work with industry leaders to curb cost increases, streamline permitting and resolve supply chain hurdles.”
