Unlike recent news that builders continue to face serious difficulties finding lots and labor to build new homes, a survey conducted by NAHB in July shows that shortages of key building materials have actually eased in 2014. In fact, only 15% of builders reported some or serious shortages of trusses or clay bricks, the highest incidence among the more than 20 materials builders were asked about. Fourteen percent reported shortages of each windows/doors, gypsum wall board, and cabinets.
The graph below shows the complete list of the 23 building materials and products in the survey, sorted by the share of builders reporting shortages.
For a number of key materials, the share of builders reporting any kind of shortage was lower in July 2014 than in May 2013. For example, while 18% of builders reported shortages of plywood, and 22% of Oriented Strand Board (OSB) in May 2013, those shares fell to 7% and 9%, respectively, in July 2014. Likewise, the share of builders reporting a shortage of framing lumber went from 18% to 8% during this period, while for wall board the share dropped from 20% to 14%.
Recent PPI data have shown that building material prices by mid-2014 were about the same than at the start of the year. The NAHB survey conducted in July confirmed that price increases this year are far less widespread than in 2013. For example, the share of builders reporting price hikes for OSB dropped from 92% in 2013 to 68% in 2014, for plywood the drop was from 90% to 70%, and for framing lumber from 92% to 73%. The graph below shows the materials/products with a 10-point-or-more decline in the share of builders reporting price increases during this period. Despite the declines, however, it is important to recognize that a majority (or large pluralities) of builders still reported price increases in all these materials.
For a few materials, the share of builders reporting price increases in 2014 was slightly larger than in 2013: for hardwood flooring the share rose to 55% from 46%; for cabinets, up to 63% from 57%; and for ceramic tiles, up to 40% from 34%.
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