Supply-chain issues leave new homes without garage doors and gutters

Home builders have increased activity over the past year in response to strong home buying demand and the lack of homes in the current home market. In many cases, the surge in demand in late 2020 and early 2021 overwhelmed builders, forcing many to halt sales in certain markets.

Now the industry is grappling with a global supply-chain crisis. Pandemic-related factory closures, transport delays and port-capacity limits have halted the flow of many goods and materials critical to home construction, including windows, garage doors, appliances and paint. Cold weather and power outages in Texas in February caused a shortage of resin, which is used in many home-building products.

While supply-chain delays for some products showed signs of easing late last year, builders say it is still taking longer than usual to finish homes. Nearly 90% of home builders surveyed in November by housing-market research firm Zonda said they were facing supply disruptions, over 75% in January 2021.

Delaying deliveries can have a domino effect of rescheduling workers, which is worsened by the lack of skilled traders in many markets.

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

Builders are scrambling to find new suppliers, stock up on manufacturing products, and use substitute materials. Some are scouring retail big-box stores for products they cannot find through normal supply channels.

Such was the case with builder Epcon Communities in Dublin, Ohio, which purchased metal shower grab bars online because they weren’t available through their typical commercial suppliers, said Steve Walker, Epcon’s vice president of manufacturing. He said the company’s electrical subcontractor resorted to buying electrical boxes at a hardware store.

“From one week to the next, the only thing we know is that we’re going to have information on something else that’s unavailable,” Mr Walker said.

Epcon sold some homes last year without gutters and downspouts, then installed those features when buyers had already moved in, Mr Walker said.

WestBay LLC’s Homes in Riverview, Fla., began ordering windows six months in advance, well above the typical 60-day lead time, said President and CEO Willie Nunn. Company homes are 30 to 60 days behind their normal schedule.

“About the time we are getting ready to build roads in a new subdivision… we are ordering windows for 100 houses,” Mr. Nunn said.

Many builders are selling homes later in the construction process, when they can better estimate their costs and schedules, said Ali Wolf, Zonda’s chief economist. There are limited options for some floor plans or design features.

“In the home-building industry, the timeline is king, as there are so many moving parts,” said Ms. Wolf.

Chief executive Lance Williams said California-based Williams Homes Inc. planned to build about 500 homes last year, but completed only 400 due to supply-chain constraints.

“It was spotty and across the spectrum — just hiccups in the supply chain that we haven’t seen historically yet,” he said. The lack of garage doors, in particular, prompted the company to “scour the western United States” to find more, he said.

Garage-door delays in Sacramento, Calif., prompted city officials in November to institute a temporary policy allowing builders to close down homes with temporary garage doors.

The delay is creating havoc for the buyers who are planning the move. And if mortgage-interest rates continue to rise, buyers could face higher borrowing costs if their home closures are delayed.

Cobie and Tierrah Finger signed up with M/I Homes Inc. to build a new home in the Houston suburbs in January 2021. and it is expected that it will be completed by August or September. This was convenient because their apartment lease was due at the end of September, and Mrs. Finger was due with her second child in October.

But construction was delayed due to cold weather and material shortages in City Permit, Texas. M/I Homes asked Fingers three times to select new exterior bricks, as the options they had selected were no longer available. The family moved in with Mr. Finger’s parents after their lease expired and they were living there when their child was born.

“It was incredibly disappointing,” said Mr. Finger. They closed on the purchase of their house on November 29.

M/I Homes said it faced the same supply-chain issues as other builders in the Houston market, and it has been upfront with buyers about the delay.

Home builders have created a huge backlog of unfinished homes. According to the Commerce Department, the number of single-family homes currently under construction rose 28.3% in November from a year ago to the highest seasonally adjusted level since 2007.

By Westbay’s Mr Nunn Holmes expects demand in their market to remain strong as more remote workers move to Florida. “It’s a great environment for us long term, but we have to sort out this supply chain,” he said.