Would-be homeowners certainly have felt the impact of the housing shortage. But builders are also bearing the brunt as they struggle to keep up with surging demand, according to a new survey.
More than 4 out of 10 builders (43%) say demand outpaced their ability to meet it at some point in 2021. But as demand stays ahead of supply, builders are also reaping the rewards: A majority of homebuilders (55%) built more homes in 2021 than the previous year.
These are some of the key findings from a survey of 300 US residential homebuilders conducted in January by ECI, which provides industry-specific and cloud-based business software solutions. The survey looked at the impact of ongoing, pandemic-era economic challenges—including supply chain delays and material shortages—on US homebuilders and their business expectations for 2022.
ECI Home Construction Survey RESULTS
Throughout 2021, homebuilders faced an increased demand for single-family homes but didn’t have enough materials to build them. In 2022, issues with materials (delays, shortages, and waste) top their list of concerns, followed by estimates and schedules. Builders also note that job sites sit idle more than they should; in fact, 44% are idle for more than 6 days in a typical month.
Still, amid unabated demand, builders feel optimistic. Almost 40% of surveyed homebuilders build entirely on spec, and another 23% sell after their structures are mostly complete (with limited options). Over 60% say the residential building market is growing in their state.
They’re also feeling positive about the future. Almost three quarters (72%) expect to build more homes this year, and of those, almost one quarter (23%) expect to build much more.
The pandemic is the single biggest threat to business, homebuilders said. And that has led them to implement changes across their organizations—such as making more conservative financial decisions (42%) and increasing prices (38%). Not as many homebuilders increased their investment in technology (22%). “That may have been helpful as they focused on meeting demand and maintaining margins,” ECI notes in a statement.
Yet there’s a strong link between revenue increases and tech investments. Among the builders who saw the most revenue growth in 2021, 68% invested in project management tools, 54% in contract management software, and 54% in CRM (customer relationship management) tech.
Among those builders who do use tech to manage and grow their businesses, the most popular systems are project management (60%), homebuilder software (51%), contract management (47%), and customer relationship management software (36%).
To read more from ECI on the study, visit their website.