Housing affordability crisis – will it continue during 2022?

Higher material costs – up by an estimated 19% since December 2020 – and lack of availability have reportedly been adding weeks to typical single-family construction times.

According to reports, the price of softwood lumber has also risen by about 85% in the last three months, bucking a downward trend that started last summer.

Dietz said he expected single-family starts to remain flat at around 1.1 million, representing a 25% increase compared to 2019, although production was still weighed down by the same issues that plagued the sector last year.

“Where a year ago, many builders had so much demand in front of them that they were actually governing or regulating how many sales they made to manage their production chains, fewer builders are going to be in that position in 2022 because of the impact of both higher home prices, and those higher expected interest rates,” he said.

Labor shortages will once again become a major issue, Dietz added, saying that the industry needed to fill an estimated 350,000 job vacancies.

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