Nearly 90 Percent of Builders Have Trouble Getting Appliances

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In the survey results described in one of last week’s posts, prices of building material ranked as the number one problem among NAHB’s single-family builders, and availability of building materials ranked second.  These concerns are not surprising, given the surge in building material prices reported in the latest Producer Price Index data from the Bureau of Labor Statistics.

Traditionally, when breaking down the specific inputs used in residential construction, the focus has usually been on products like softwood lumberconcrete, and gypsum wallboard.  Recently (and unusually), however, builders have started to complain about a problem getting appliances.

The existence and incidence of the problem was confirmed in the monthly survey for the NAHB/Wells Fargo Housing Market Index (HMI).  The February survey contained a special question asking the HMI panel of single-family builders if they had experienced difficulty obtaining appliances in a timely fashion over the past 6 months.  In response, nearly 90 percent of the builders said yes, they had experienced such a difficulty—51 percent to a major extent, 38 percent to a minor extent.

The survey didn’t ask for more information about the nature of the difficulty, but one builder wrote in that his appliances had been on backorder for months.

Although the appliance problem is clearly affecting builders of all sizes, it is not not quite as ubiquitous among smaller builders.  “Only” 82 percent of builders who built fewer than six homes last year reported trouble getting appliances in a timely fashion—compared to at least 90 percent of builders in the three larger size tiers.

In some cases, a builder may be able to sell a house without including all appliances, leaving it to the ultimate home owner to supply one or more of them.  This is not always practical, however—depending on the type of house and appliance.  Although only a third of new single-family homes come with clothes washers and clothes dryers (according to the 2017 reports from the Annual Builder Practices Survey conducted by Home Innovation Research Labs), the percentages are much higher for standard kitchen appliances, which are often designed and marketed as an integral part of the space.  According to the same survey report, builders provide refrigerators in two-thirds of their single-family homes, garbage disposals in 85 percent, microwaves in 88 percent, dishwashers in 93 percent, and some combination of range/cooktop/wall oven in 97 percent.  So when these appliances are not available as usual, large proportions of new home completions and closings are affected.

The shortage of appliances is also likely to be affecting the residential remodeling market, as kitchen renovation has long been one of the most common types of remodeling projects.

 



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