[The recent] NMHC Construction Survey found that 90% of respondents reported construction delays[ with 78% of this group reporting delays in permitting and 86% experiencing start delays. Notably, an increasing share of respondents reported delayed starts due to a lack of availability in construction financing—from 7% of respondents in March, to 15% in June, to 31% in this survey.
With construction delays a constant, costs remain on the rise with 76% of respondents experiencing price increases in projects, at an average rate of 9%. One bright spot is that lumber prices seem to be decreasing. Lumber prices, on average, declined for a second straight quarter, dropping 2% over the last three months.
Labor costs are on the rise as well with 21% of respondents indicating that labor costs had increased more than expected over the last three months, though encouragingly, that was the lowest percentage in the last three quarters.
Most Costs on the Rise
- Exterior Finishes & Roofing +8%
- Electrical Components +12%
- Appliances +6%
- Insulation +6%
- Lumber -2%
“The nation is facing extraordinary housing affordability challenges in the wake of the pandemic,” said Doug Bibby, NMHC President. “Costs are up across the board and projects are taking longer and longer to complete. Lawmakers at all levels of government should look at every policy option available to them to reform antiquated zoning, streamline the development process and incentivize the building of new housing of all types and at all prices points.”
Prior to the pandemic, NMHC published the NMHC Housing Affordability Toolkit. As communities across the country deal with affordability challenges, the Toolkit includes six common local housing policies and provides recommendations for how localities can tailor them to their unique market conditions.
Based in Washington, D.C., the National Multifamily Housing Council (NMHC) is the leadership of the apartment industry. We bring together the prominent owners, managers and developers who help create thriving communities by providing apartment homes for 36.8 million Americans, contributing $3.4 trillion annually to the economy. NMHC provides a forum for insight, advocacy and action that enables both members and the communities they help build to thrive. For more information, contact NMHC at 202/974-2300, e-mail the Council at [email protected], or visit NMHC’s Web site at nmhc.org