A new survey suggests that building materials in the United States remain in plentiful supply despite the fact that land and labour are becoming more difficult to find.
In its latest survey, the National Association of Home Builders says the number of builders reporting shortages of OSB and gypsum wall board and plywood fell from 22 per cent, 20 per cent and 18 per cent to nine per cent, 14 per cent and seven per cent respectively.
Across all 20 types of materials, meanwhile, no more than 15 per cent of all builders reported either some or serious shortages of supply, with trusses, clay bricks, windows and doors, gypsum wall board and cabinets being the most difficult to find and plumbing fixtures, vinyl siding, structural or insulated panels, HVAC equipment and copper wiring being extremely easy to source.
Furthermore, pricing pressures of materials have also eased. Compared with the previous survey in May 2013, the number of builders reporting price increases in OSB, plywood, framing timber, insulated panels, roofing materials and steel is down significantly.
The results contrast with other recent NAHB surveys which suggest that even the current modest recovery in housing construction will soon run up against supply side constraints such as land and labour.
In terms of labour, for instance, 46 per cent of builders in one recent survey reported a shortage of workers and tradespeople – the highest level on record since 2000, with carpenters, framing crews and bricklayers being amongst the trades in greatest demand.
Meanwhile, more builders (60 per cent) report low supplies of land than at any other time since NAHS surveys began in 1997.
The fact that such constraints are being reported at only modest levels of activity – notwithstanding the recent recovery, annual housing start numbers have only just risen back above one million and are still well below the 1.6 million average over the four decades to the year 2000 – is raising questions about the capacity of the industry to build sufficient numbers of homes to meet population needs.
A recent entry on the Sober Look blog, for example, talked of a ‘new housing crisis,’ pointing out that the number of new privately owned units being completed each year per thousand people within the population had fallen from between eight and 10 between 1980-20o0 to around four today, and that rental vacancy rates not just in in coastal areas but also areas such as the MidWest had fallen over the past decade.
That said, talk of a crisis seems overblown, at least in the short term. In the second quarter of this year, for example, 62.6 per cent of new and existing homes sold during the quarter were affordable to households on the median income, according to the most recent NAHB/Wells Fargo Housing Opportunity Index, a number broadly consistent with long term trends. Meanwhile, the current national rental vacancy rate of 7.5 per cent nationally is actually slightly higher than it has been at most stages over the past 60 years.