The rising cost of building materials will continue to slow development over the next year, resulting in what JLL analysts are calling a "rare period of favorable supply-side dynamics." 

A new report on the multifamily sector from the global CRE firm notes that while new deliveries continue to tick up, challenging occupancy and rent growth in certain cities, a shortage of both skilled labor and materials is allowing markets to absorb supply at a more palatable rate. 

Lumber prices have skyrocketed over the past year, as GlobeSt.com previously reported, leading industry groups like the National Association of Home Builders to lobby the Biden Administration to intervene. Steel has also surged 160%, and some industry insiders have counseled construction firms to stockpile a supply of both building materials for the second half of 2021, as many predict shortages will continue to plague builders.  JLL Senior Research Analyst Henry D'Esposito recently noted that material cost growth will likely outpace all other elements of construction cost increases this year, and that "some developers who were already taking a wait-and-see approach to projects during the pandemic are hesitant to jump back in for fear of buying at the top of the market."