At Home Innovation Research Labs, we’re continuing to monitor the building industry climate and market opportunities for offsite housing construction through our surveys of home builders. Most recently, our August 2019 Omnibus Survey of builders included several questions on this topic.
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In recent years, a great deal of emphasis has been placed on the skilled labor shortage affecting construction and the related changes in building and buying patterns this has caused among home builders. But there may be an even greater pain-point among builders that’s getting a lot less attention—builder sensitivity to increases in building materials prices. Given the nature of the construction business, price increases over the course of home construction (currently averaging 7 months from breaking ground to completion) cuts into margins, while price declines are a windfall. The problem is that lately price increases have far outweighed decreases.
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