Hello All, I hope you are all busy. Our OHBA President elect, Chris Tsonton, asked me if I had heard if NAHB had any predictions on what the hurricanes might do to material pricing in the near future? So, I asked Rob Dietz, NAHB’s Chief Economist. Below are his thoughts.
Randy K Strauss
Ohio State Rep to NAHB
Strauss Construction, Inc.
All estimates are preliminary of course, but here what we know and what have learned bases on past disaster events.
Wages and building materials in the immediate area of impacts are likely to rise between 10% and 20% over a period lasting 6 to 12 months. We estimated for the WSJ that the Houston area likely needs an additional 10,000 to 20,000 workers to handle just residential repair alone.
What does this mean for the rest of the nation?
Worker shortages in nearby states are going to seem worse over the next 6 months.
Building materials prices will be slightly higher, but the impact will be muted because while we expect higher demand for repair and restoration work, single-family construction in the area of impact (representing about 8% of total single family builds nationwide) will be slowed, reducing demand.
Past history suggest only a slight impact on lumber prices (trade policy and larger economic events have much bigger impacts on lumber), but shingle and roofing prices could be 5% higher or more compared to recent prices.
Katrina offers us a lot of data, but there are important differences between that event and the Harvey/Irma elements. New Orleans experienced a permanent loss of population and had many more homes totally destroyed, compared to severely damaged. Cross our fingers on Irma, but if it moves up the middle of the state, that could be the same.
So we’re expecting some increase in material prices, but not a large effect. As more precise estimates of the need for repair comes in, we’ll adjust accordingly.
ROBERT DIETZ SVP & Chief Economist
National Association of Home Builders
1201 15th Street, NW | Washington, DC 20005
d: 202.266.8285 m: 202.280.8710 e: rdietz@nahb.org w: nahb.org