Labor shortage and costs of building materials continue to hammer the new home market

New figures came out today from the Census Bureau on housing starts for the month of June. Construction of new houses slightly decreased in the last report (April to May). But overall, new construction is stronger than it was last year, at the height of the pandemic.

However, other factors influence the construction of new housing. The demand for new housing always exceeds supply.

“We definitely have a housing shortage in this country,” said Jeffrey Cleveland of Payden & Rygel, adding that there is also a shortage of construction workers at present.

“Builders can’t build them fast enough and they can’t get enough manpower to put them together,” he said.

Adding to the labor shortage, the high price of lumber a few months ago slowed down the construction of new homes. Today, the price of wood is falling.

“The turnaround has been dramatic from what we’ve seen over the past year and a half,” said Ken Simonson of the Associated General Contractors of America.

But, he said, builders are still considering high prices for other key building materials, like copper and brass.

“For example, the steel mill products index increased by 87%… for aluminum by 33%. So these are staggering increases, ”he said.

And so, the cost of materials as well as the shortage of manpower means that it is always a challenge to build a new house.

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