Supply-Chain Issues Lengthened Single-Family Build Times in 2022

The 2022 Survey of Construction (SOC) from the Census Bureau shows that the average completion time of a single-family house is around 9.6 months, including a little over a month from authorization to start and another 8.3 months to finish the construction.  This is almost one month and a half longer than the average completion time in 2021, reflecting supply-side challenges and skilled-labor shortages that persisted throughout the year. The time from authorization to completion varies across the nation and depends on the geographic location and whether the house is built for sale or custom-built.

Among all single-family houses completed in 2022, houses built for sale required the shortest amount of time, 8.9 months from obtaining building permits to completion, while houses built by owners (custom builds) required the longest time, 13.4 months. Homes built by hired contractors normally needed around 11.3 months, and homes built-for-rent took about 11.6 months from authorization to completion. The time from permit to start for homes built for sale and built by contractors took much longer in 2022 than in 2021. Between authorization and the start of construction, built for sale and built by contractors on owner’s land took 1.33 month and 1.28 months respectively. The permit-to-start time was even longer for homes built-for-rent (1.53 months), in contrast with the past when construction typically started within the same month after obtaining building authorization.

 

 

The average time from authorization to completion also varies across divisions. The division with the longest duration was New England (12.6 months), followed by the Middle Atlantic (11.8 months), the Pacific (10.8 months), the East South Central (10.1 months) and East North Central (9.7 months) in 2022. These five divisions had average time from permit to completion exceeding the nation’s average (9.6 months). The shortest period, 8.6 months, is registered in the South Atlantic division. The average waiting period from permit to construction start varies from the shortest time of 24 days in the East North Central to the longest one of 47 days in South Atlantic.

 

 

The SOC also collects additional information for houses built for sale, including a sale date when buyers sign sale contracts or make a deposit. Looking at single-family homes built for sale and completed in 2022, 25.5% were sold before construction started, 43.9% sold while under construction, 13.9% sold during the month of completion, and 12.7 % sold after completion. The share of completed houses remaining unsold was 4%.


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One thought on “Supply-Chain Issues Lengthened Single-Family Build Times in 2022

  1. This is significant in the context of construction loans as borrowers relying on these loans may face challenges in completing their projects within the expected timeframe. Check us at builderloans.net for your construction loans needs.

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