Despite shortages of materials, new housing construction is up
Despite shortages of materials, new housing construction is up
Census data that came out Thursday shows the number of housing starts jumped in November. The rate of new construction was nearly 12% above October’s revised rate.
That’s somewhat surprising, both because the fall is not exactly prime construction season and the building industry is still struggling with worker shortages and supply chain slowdowns.
For months now, builders have bemoaned the materials they just can’t get because of supply barriers. It’s enough to make you feel like Peter, Paul and Mary in the ’60s.
For builder Jerry Konter in Savannah, Georgia, the problem isn’t hammers but windows. “We have a 28-week delay on the windows,” he said.
After all, you can’t finish a 250-unit apartment building without windows. “So we are getting to a stage and then we’re held, you know, at a standstill,” he said.
But contractors are getting creative and finding workarounds to move projects forward, Konter said, and that may be one reason housing starts are up.
“Construction employment has been increasing in spite of all those help wanted signs, and materials are eventually getting delivered,” said economist Ken Simonson with the Associated General Contractors of America.
So construction might take twice as long these days, but new projects are getting started.
High housing starts are tied to strong demand, explained Susan Wachter, professor of real estate at the Wharton School of the University of Pennsylvania.
“And there’s a lack of existing homes for sale. So where is the buyer to go but to the new-construction market? So that’s the good news,” she said.
The bad news, she said, is that the added costs of shortages and delays are being passed on to homebuyers.
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