VOL 2024 ISSUE 2
www . elpasobuilders . com
VOL 2024 ISSUE 2
BUILDERSOUTLOOK
PUBLISHED BY THE EL PASO ASSOCIATION OF BUILDERS : NATIONAL , STATE AND LOCAL HOME BUILDING INDUSTRY NEWS
What lies ahead for Builders in 2024 ?
NAHB
According to the January 2024 survey for the NAHB / Wells Fargo Housing Market Index ( HMI ), high interest rates were a significant issue for 90 % of builders in 2023 , and 77 % expect them to be a problem in 2024 . The second most widespread problem in 2023 was rising inflation , cited by 83 % of builders , with 52 % expecting it to be a problem in 2024 .
Concerns over the cost and availability of labor have increased significantly in recent years , rising from only 13 % of builders in 2011 to its peak at 87 % in 2019 . Fewer builders reported this problem in 2020 ( 65 %), but the share rose again in 2021 ( 82 %) and 2022 ( 85 %). The share eased slightly in 2023 to 74 %, and 75 % expect the cost and availability of labor to remain a significant issue in 2024 .
The share of builders experiencing significant problems with building materials prices has fluctuated over the years as well , reaching as low as 33 % in 2011 to a peak of 96 % in 2020 , 2021 and 2022 . The slowdown in single-family construction in 2023 made this less of a problem for builders last year , with 63 % reporting it as a significant issue . Fewer ( 58 %) expect it to remain an issue in 2024 .
Compared to the supply-side problems of materials and labor , problems attracting buyers have not been as widespread , but builders expect many of them to become more of a problem in 2024 . Buyers expecting prices or interest rates to decline if they wait was a significant problem for 71 % of builders in 2023 , with 77 % expecting it to be an issue in 2024 . A majority of builders ( 56 %) also cited negative media reports making buyers cautious as a significant issue that is expected to continue in 2024 .
U . S . Expected to Increase Lumber Tariffs This Summer
The U . S . Department of Commerce has signaled that it plans to raise tariffs later this year on imports of Canadian softwood lumber products from the current rate of 8.05 % to about 14 % following its annual review of existing tariffs .
Although NAHB is disappointed by this action , this decision is part of the regularly scheduled review process the United States employs to ensure adequate relief to American companies and industries impacted by unfair trade practices .
The Department of Commerce initiated its fifth administrative reviews of its softwood lumber anti-dumping and countervailing duty orders last March and announced its preliminary findings of these reviews at the beginning of this month .
The agency is expected to issue its final results later this summer or early fall , at which time the higher duties will take effect .
For years , NAHB has been leading the fight against lumber tariffs because of their detrimental effect on housing affordability . In effect , the lumber tariffs act as a tax on American builders , home buyers and consumers .
With housing affordability already near a historic low , NAHB continues to call on the Biden administration to suspend tariffs on Canadian lumber imports into the United States and to move immediately to enter into negotiations with Canada on a new softwood lumber agreement that will eliminate tariffs altogether . And we continue to work with our allies in Congress to put pressure on the administration to take action .