Why does it take so long to build a home now?

Why does it take so long to build a home now?

Baker Residential why it takes longer to build

January 27, 2022

We’ve become a culture that doesn’t want to wait. We want fast downloads on our devices and same- or next-day delivery. We use mobile apps to avoid waiting in line, no matter how short. So, we’ve become impatient with any delays. Over the past year, the demand for new homes has skyrocketed. And the anxious homebuyers are asking, “Why does it take so long to build a home now?” Baker Residential understands the frustration, and we want you to know the reasons why building a home takes longer now than it did before COVID.

Basically, the housing industry is at the center of the perfect storm that led to strains on materials and labor. Here’s how it unfolded.

  • When the pandemic caused people to stay at home, they became unhappy with their residences and, boosted by the temptation of the historically low interest rates, went in a virtual search of new homes.
  • Inventory of new homes was depleted faster than builders anticipated, having been unprepared for the buying frenzy,
  • Mills and factories that produced building materials, supplies, and components like appliances, windows, flooring, and cabinetry shut down because they were deemed “non-essential businesses”.
  • In many states, homebuilders were among the non-essential business groups, so construction halted for a time.
  • Construction workers and tradespeople (electricians, plumbers, framers, roofers, carpenters) had no work during the shutdown, but received unemployment compensation from the government.
  • When homebuilders restarted, they faced the lack of available materials because of the factory shutdowns. Without the influx of inventory coming from those manufacturers, builders experienced substantial delays, such as a 6-month wait for windows.
  • In addition to the lack of supplies and materials, homebuilders had to deal with a severe labor shortage. Their crews had either found work elsewhere or were content to stay home and receive unemployment benefits from the government.

According to U.S. Census data reported by realtor.com, “Global supply chain issues have led to a backlog of nearly $3 billion in goods that have been ordered but not yet shipped. Even if the appliance is made in the U.S., many use parts and computer chips that are made abroad. So if those are held up in the supply chain snafus, the appliances can’t be manufactured, holding up the whole system for everyone.”

Prices spike with high demand, low supply

The cost of lumber was rising even before the shortage, because a substantial amount was imported from Canada. The U.S. government had imposed tariffs on that lumber, which pushed up the price. The sharp rise in demand for lumber then propelled the price 377% in one year, adding approximately $18,600 to the cost to build an average home in the U.S.

We’re seeing lumber prices come down this year, although it has been more like a roller coaster than a slow decline. The price dropped 74% and then jumped 127% before dropping again.

The lumber shortage spawned other problems. Manufacturers of furniture, cabinetry, millwork, and other items requiring lumber faced the same issues as homebuilders. Delays and price increases became yet another woe for homebuilders and homeowners alike.

Paint has also seen a jump in pricing. Key ingredients became harder to source. Meanwhile, chemical processing plants in Texas were damaged by extreme weather there, including a bizarre cold snap and several hurricanes.

Workers aren’t working

Long before the pandemic put jobs on hold, the construction industry was struggling to find enough skilled labor. There just wasn’t enough interest among the younger generation to move into the trades. So, as older workers retired, there wasn’t an influx of skilled professionals to take their place.

In addition, concerned by the layoffs, some construction workers shifted to another way to make a living. By the time their old jobs were ready for them again, they had moved on. 

With fewer workers on their crews and the limited inventory of critical supplies, builders have experienced lengthier build times. 

“We understand that people are anxious to move into their new homes,” explains Tim Lantz, Vice President of Sales and Marketing at Baker Residential. “We’re working with each homebuyer to keep them updated on the progress of their homes. Open communication is the best way to manage expectations and keep everyone informed.”

We’re working on expanding our inventory of new townhomes and homes for sale in Raleigh, Durham, and the surrounding area. Baker Residential has communities underway at Starling Woods in Durham, LakeStone in Wake Forest, and new townhomes at The Parc at Edwards Mill in Raleigh. A new home is within your reach! Contact us at Baker Residential to explore the many opportunities,


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