Supply-Chain Issues Are Causing New Owners to Move Into Unfinished Homes

Supply-chain backlogs and shortages across the nation are slowing new home construction, and in some cases, leaving projects unfinished. According to Realtor.com, pandemic-related factory closures, transportation delays, and port-capacity limits are to blame, but many unforeseen disruptions are further straining customer-supplier relationships and wreaking havoc on new construction.

Freezing weather, power outages, flooding, and wildfires are slowing the production of some building materials, leading to major price increases and delivery delays. A shortage of skilled labor is also leaving work crews without the necessary assistance to complete new construction projects. As a result, some new homeowners are scratching their original design plans, and others are moving into homes without garage doors, gutters, or other key features.

While supply-chain delays for some products showed signs of easing at the end of last year, builders say it is still taking weeks longer than normal to finish homes. About 90% of home builders surveyed by housing-market research firm Zonda in November said they were experiencing supply disruptions, up from 75% in January 2021.

Delivery delays can cause a domino effect of rescheduling work crews, which is worsened by a shortage of skilled tradespeople in many markets.

Many builders so far have been able to pass increased material costs along to home buyers. But with home prices higher than ever—the median price of a newly built home in November rose 18.8% from a year earlier to a record $416,900—some builders are concerned about pricing out potential buyers.

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