Spending

Expect delays on these 3 renovation projects in 2022 as 85% of builders report material shortages

"Appliances have outrageously long lead times."

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Annual home improvement and repair spending will be up 9% from last year, according to projections by the Joint Center for Housing Studies of Harvard University. Year-over-year gains in annual improvement and repair is expected to maintain that pace in 2022.

Contractors are feeling the pressure of demand when it comes to remodeling and building homes. Steve Cunningham, owner of Cunningham Contracting Inc. in Williamsburg, Virginia, says that in both 2020 and 2021, he received 20% to 25% more calls than he did in 2019, all requesting new projects.

The wait for many products has been longer, he says. Cabinets, windows, tiles, insulation for refrigerators — all are experiencing shipping delays.

"If we were waiting on something and it [normally] takes five or six weeks to get in, it might have taken eight weeks," he says. "That eight weeks went to 12 weeks and 12 weeks went to 18 weeks and 18 weeks went to 26 weeks."

Some products are harder to get than others, says Robert Dietz, chief economist at the National Association of Home Builders. Here are the top products that are experiencing shipping delays due to supply chain and manufacturing constraints, according to NAHB. "All of these are items, at least 85% of builders are indicating shortages," Dietz says.

1. Installation of new kitchen appliances

A semiconductor ship shortage has slowed down the production of most appliances, says Ray Williams, director of project administration at Curbio, a home improvement company for realtors. This includes dishwashers, refrigerators, and microwaves.

"With the computer chip issue, It doesn't matter if you're looking at Samsung, GE, Whirlpool, they have all really been affected by these supply chain issues," he says.

A whopping 90% of builders say they are having trouble getting appliances, according to an NAHB survey.

"Whether you're improving an existing home or redoing the kitchen with a new oven and microwave, those kinds of appliances, things that used to have guaranteed delivery time of weeks, are now taking months," Dietz of NAHB says.

2. Adding an extension to your home

Plywood, and structural lumber, used for framing houses, and oriented strand board are hard to come by and are all necessary to build a home or add an extension to an existing one. Due to the increased price of lumber, they are much more expensive.

"Lumber was the canary in the coal mine," Dietz says. "Lumber went from $350 per 1,000 board feet to $1,500 per 1,000 board feet."

If we were waiting on something and it [normally] takes five or six weeks to get in, it might have taken eight weeks.
Steve Cunningham
owner of Cunningham Contracting Inc.

Now, the price has come back down to around $800 per 1,000 board feet, according to Trading Economics.

About one-third of America's lumber comes from Canada, he adds, and recently the U.S. Department of Commerce said it will impose a 17.9% tariff on softwood lumber imported from Canada. The previous rate was 8.99%. This will "add to the cost of building single family homes," Dietz says.

3. Installation of windows and doors

"It can be anywhere from 8 to 30 weeks to get a window in right now," Cunningham of Cunningham Contracting Inc. says.

Like appliances and lumber, the elongated delivery time applies to pretty much every type of door and window. However, "etched and stained glass windows have much longer lead times," says Williams.

Lumber was the canary in the coal mine.
Robert Dietz
chief economist at NAHB

If you need your products now, it's best to not be picky, he adds. Visit big box stores and see what's in stock.

"When it comes to window and doors, if you can go with on-the-shelf stock you'll definitely be ahead of the game," he says. "Flexibility is key."

'Challenges in the supply chain to last well into 2022'

All of this leads to higher costs of construction and longer construction times. "Eighty-five percent of remodelers have increased prices of their projects," Dietz says. "Half have increased prices due to higher construction costs."

Delays on any of these items are not going away anytime soon. "I think from the residential construction perspective, we can expect some of the challenges in the supply chain to last well into 2022," Dietz says.

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