A shortage of a critical room used to build basements in new homes threatens to cripple construction, bringing the final blow to an industry that has been squeezed by rising mortgage rates and a shortage of timber. artwork.
Flat steel shuttering ties, a small piece of metal that binds the aluminum panels that form the walls, allowing builders to pour concrete in between, are rare due to a number of factors, including l just-in-time inventory, import tariffs and supply chain impacts of COVID-19.
“It’s a perfect storm of events and factors, much like other material shortages that are pressed by the continued record pace of residential construction,” said Jim Baty, executive director of the Concrete Foundations Association, a commercial organization for the residential concrete industry. . “CFA is leading an unprecedented collaborative effort to offer as many solutions as possible to ensure minimal disruption to the market while maintaining the quality and safety of construction workers.”
The part costs around a dollar but is essential for building any home with a basement or crawl space. Qualified construction crews could switch to insulated concrete formwork, but few are trained to do so.
About 24% of U.S. homes built in 2019 had a partial or full basement, according to the National Association of Home Builders. Fourteen percent had a crawl space.
It could be “catastrophic,” said Tom Woods, a 55-year-old industry veteran and founder of Woods Custom Homes, a home builder based in Blue Springs, Missouri. “If you don’t pour basements or walls, you’re not going to build houses.”
Contractors have to deal with wall-mounting rations of one pallet per week, which can build around 10 medium-sized houses. These supplies could drop to zero in the coming weeks.
The shortage is of particular concern as it comes at a time of warming weather, allowing builders to start pouring foundations as the ground thaws from its winter frost.
“There is no clear picture of how long this will last,” said Shawn Woods, president of Ashlar Homes, a builder specializing in homes costing between $ 250,000 and $ 350,000 in the Greater Montreal area. Kansas City.
|TOL||TOLL BROTHERS||65.07||+0.70||+ 1.10%|
|DHI||DR HORTON INC.||95.94||+1.57||+ 1.66%|
None of the three largest US home builders, Lennar Corp., Toll Brothers Inc. and DR Horton, responded to FOX Business’s request for comment.
While the low supply of wall ties is a short-term headwind for the industry, home builders are facing a lumber shortage that has driven prices up 180%, adding about $ 30,000 to the cost of ‘a smaller house.
Soaring lumber prices “are really starting to become a problem,” said Jerry Howard, CEO of the National Association of Homebuilders. He notes that the price increases have led to the loss of contracts and the decrease in housing projects.
Shortages of cabinets, appliances and vinyl for extruding windows have all posed problems for builders this year, as has an 80% rise in copper prices. If that’s not enough, builders now face the burden of higher mortgage rates.
The rate on a 30-year fixed mortgage climbed to seven-month high by 3.23% during the week ended Feb. 27, according to the Mortgage Bankers Association. The rate has increased seven of the past nine weeks, hitting a record low of 2.85% in December.
Rising mortgage rates and rising lumber prices “will take some of the steam out of the overheated housing market,” said Dr. Lawrence Yun, chief economist at the National Association of Realtors.
As rising mortgage rates, rising lumber costs, and a shortage of wall fasteners all serve as new construction, one thing is clear: America needs to build more in order to address the housing shortage the country is facing. is confronted.
“If we don’t have an adequate supply, it’s just going to drive up prices much faster than people’s income growth,” Yun said.