Multifamily Construction Deals Reprice Amid Ongoing Delays

A majority of builders—a whopping 89%—are experiencing construction delays that are hampering homebuilding as the nation’s housing demand surges. 

The new Construction Quarterly Survey by the National Multifamily Housing Council also found that of those experiencing overall delays, 85% reported delays in both starts and permitting. In a statement announcing the findings, NHMC noted that the problems that first originated during the onset of the pandemic—namely, supply chain problems, materials and labor shortages, and permitting and entitlement delays—continue to plague the industry, and it called for federal officials to step in. “Our nation is currently facing deep housing affordability challenges that can only be addressed through building new homes. Yet, rising costs, permitting delays and a lack of labor are making it increasingly difficult to develop housing of all types,” said Doug Bibby, NMHC President. “Lawmakers at all levels of government need to acknowledge this crisis and work with industry leaders to curb cost increases, streamline permitting and resolve supply chain hurdles.”

Pricing continues to be an issue for respondents as well, with 92% saying deals have been repriced up over the past three months, with increases clocking in at 25% on average. In addition, 55% reported that labor costs increased more than expected over that same period.

“The price of lumber continues to be one of the more significant obstacles to apartment construction, with the average respondent reporting a 45% increase in prices over the past three months,” NMHC noted in a report analyzing the results. “This iteration of the survey specifically highlights price changes and subsequent mitigation practices for five prevalent materials including exterior finishes and roofing, electrical components, appliances, insulation and lumber.”