Supply chain creating unprecedented housing issues: NAHB CEO
Jerry Howard says the disruptions are creating never before seen ‘unusual circumstances’ for new homes
NAHB CEO warns of never before seen 'unusual circumstances' for new homes
National Association of Home Builders CEO Jerry Howard describes how supply chain issues are affecting consumers who are building new homes.
National Association of Home Builders CEO Jerry Howard noted on Tuesday that supply chain disruptions are creating unprecedented issues, telling "Varney & Co." they are causing "unusual circumstances" as it pertains to new homes.
Howard acknowledged that the issues are not impacting sentiment, but did stress that the "supply chain is still a headwind."
He also told host Stuart Varney that "demand is so strong and the supply is so low" for new homes and argued if the supply chain can get "fixed" some "real good years" for the market are ahead.
Howard offered insight into the industry on the same day it was revealed homebuilder confidence rose in November as low inventories and strong buyer demand helped boost confidence despite the ongoing supply chain disruptions.
The National Association of Home Builders/Wells Fargo Housing Market Index this month rose three points to 83. Analysts surveyed by Refinitiv were expecting homebuilder sentiment to hold at 80.
The index can range between 0 and 100 with any print over 50 indicating positive sentiment. Any reading above 80 signals strong demand.
"The solid market for home building continued in November despite ongoing supply-side challenges," said NAHB Chairman Chuck Fowke. "Lack of resale inventory combined with strong consumer demand continues to boost single-family home building."
INFLATION WILL LIKELY GET WORSE BEFORE IT STARTS IMPROVING, GOLDMAN WARNS
689K new single-family homes under construction as supply prices continue to rise
National Association of Home Builders CEO Jerry Howard says new home construction data is showing similar trends to the 2008 housing market crash.
Howard warned on Tuesday that there is a delay built into contracts when building a home as a result of the supply chain disruptions.
He noted that typically when a home is being built, consumers pick the appliances and finishing touches later in the process, but because of the supply chain issues, "you try and get the consumer to pick their products right up front."
"Now you try to get them to pick it right away," he told Varney. "Get locked in and put the orders in because it can take six, seven, eight months to get some of these products in."
Howard also pointed out that delays for appliances, including washing machines and dishwashers, are not the only inconvenience, but consumers can also face potential increases in costs.
He noted that consumers typically choose the appliances they want at the current price set, but warned that in six months, when the appliance comes in, that price could change.
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"The price of this refrigerator or this generator may be significantly higher and you’ve got to be on the hook for it," Howard said, stressing that "there are some unusual circumstances that we’ve never seen before."
NAHB CEO on supply chain problems impacting industry
National Association of Home Builders CEO Jerry Howard notes 'demand is so strong and the supply is so low' for new homes and argues if the supply chain can get 'fixed' some 'real good years' for the market are ahead.
On Wednesday it was revealed that the consumer price index climbed 6.2% year over year in October, according to the Labor Department. The increase marked the largest annual gain since November 1990.
The price of appliances shot up 6.6% in October compared to the same time last year, according to the Labor Department.
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FOX Business’ Jonathan Garber contributed to this report.